EXHIBIT 10.1


 


 


REVOLVING CREDIT


AGREEMENT


 


 


DATED as of
June 30, 2004


 


 


among


 


 


WEIDER NUTRITION
GROUP, INC.,


 


 


THE FINANCIAL
INSTITUTIONS LISTED


ON SCHEDULE 1
HERETO


 


 


and


 


 


KEYBANK NATIONAL
ASSOCIATION


in its capacity as
Agent


 

















 


TABLE OF CONTENTS


 


 


	
  1.

  	
  DEFINITIONS
  AND RULES OF INTERPRETATION.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1. 1.

  	
  Definitions.

  	
   

  
	
   

  	
  1. 2.

  	
  Rules of
  Interpretation.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  THE REVOLVING CREDIT
  FACILITY.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2. 1.

  	
  Commitment to
  Lend.

  	
   

  
	
   

  	
  2. 2.

  	
  Fees.

  	
   

  
	
   

  	
  2. 3.

  	
  Reduction
  of Total Revolving Credit Commitment.

  	
   

  
	
   

  	
  2. 4.

  	
  Increase
  of Total Revolving Credit Commitment.

  	
   

  
	
   

  	
  2. 5.

  	
  The
  Revolving Credit Note.

  	
   

  
	
   

  	
  2. 6.

  	
  Interest on
  Revolving Credit Loans.

  	
   

  
	
   

  	
  2. 7.

  	
  Requests for
  Revolving Credit Loans.

  	
   

  
	
   

  	
  2. 8.

  	
  Conversion
  Options.

  	
   

  
	
   

  	
  2. 9.

  	
  Funds
  for Revolving Credit Loan.

  	
   

  
	
   

  	
  2. 10.

  	
  Repayment of
  the Revolving Credit Loans.

  	
   

  
	
   

  	
  2. 11.

  	
  Borrowing Base.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  [INTENTIONALLY OMITTED]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  LETTERS
  OF CREDIT.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4. 1.

  	
  Letter
  of Credit Commitments.

  	
   

  
	
   

  	
  4. 2.

  	
  Reimbursement
  Obligations of the Borrower.

  	
   

  
	
   

  	
  4. 3.

  	
  Letter
  of Credit Payments.

  	
   

  
	
   

  	
  4. 4.

  	
  Obligations
  Absolute.

  	
   

  
	
   

  	
  4. 5.

  	
  Reliance by
  Issuer.

  	
   

  
	
   

  	
  4. 6.

  	
  Letter of
  Credit Fee.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  CERTAIN GENERAL PROVISIONS.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5. 1.

  	
  Funds for
  Payments.

  	
   

  
	
   

  	
  5. 2.

  	
  Computations.

  	
   

  
	
   

  	
  5. 3.

  	
  Inability to
  Determine LIBOR Rate.

  	
   

  
	
   

  	
  5. 4.

  	
  Illegality.

  	
   

  
	
   

  	
  5. 5.

  	
  Additional
  Costs, etc.

  	
   

  
	
   

  	
  5. 6.

  	
  Capital
  Adequacy.

  	
   

  
	
   

  	
  5. 7.

  	
  Certificate.

  	
   

  
	
   

  	
  5. 8.

  	
  Indemnity.

  	
   

  
	
   

  	
  5. 9.

  	
  Interest
  After Default.

  	
   

  
	
   

  	
  5. 10.

  	
  Maximum
  Lawful Rate.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  COLLATERAL SECURITY
  AND GUARANTIES.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6. 1.

  	
  Guaranty and
  Security of Guarantor.

  	
   

  
	
   

  	
  6. 2.

  	
  Additional
  Security of Borrower.

  	
   

  



 


i

















 


	
  7.

  	
  REPRESENTATIONS AND
  WARRANTIES.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7. 1.

  	
  Corporate Authority.

  	
   

  
	
   

  	
  7. 2.

  	
  Governmental Approvals.

  	
   

  
	
   

  	
  7. 3.

  	
  Title to Properties;
  Leases.

  	
   

  
	
   

  	
  7.
  4.

  	
  Financial Statements;
  Solvency.

  	
   

  
	
   

  	
  7. 5.

  	
  No Material Changes, etc.

  	
   

  
	
   

  	
  7.
  6.

  	
  Franchises,
  Patents, Copyrights, etc.

  	
   

  
	
   

  	
  7. 7.

  	
  Litigation.

  	
   

  
	
   

  	
  7.
  8.

  	
  No Materially Adverse
  Contracts.

  	
   

  
	
   

  	
  7. 9.

  	
  Compliance
  with Other Instruments, Laws, etc.

  	
   

  
	
   

  	
  7. 10.

  	
  Tax Status.

  	
   

  
	
   

  	
  7. 11.

  	
  Holding
  Company and Investment Company Acts.

  	
   

  
	
   

  	
  7. 12.

  	
  [Intentionally
  Omitted].

  	
   

  
	
   

  	
  7.
  13.

  	
  Perfection of Security
  Interest.

  	
   

  
	
   

  	
  7. 14.

  	
  Certain Transactions.

  	
   

  
	
   

  	
  7. 15.

  	
  Employee Benefit Plans.

  	
   

  
	
   

  	
  7. 16.

  	
  Tax
  Shelter Regulation.

  	
   

  
	
   

  	
  7.
  17.

  	
  Environmental Compliance.

  	
   

  
	
   

  	
  7. 18.

  	
  Subsidiaries,
  etc.

  	
   

  
	
   

  	
  7. 19.

  	
  Bank
  Accounts.

  	
   

  
	
   

  	
  7. 20.

  	
  Disclosure.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  AFFIRMATIVE
  COVENANTS OF THE BORROWER.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8. 1.

  	
  Punctual
  Payment.

  	
   

  
	
   

  	
  8. 2.

  	
  Maintenance of Office.

  	
   

  
	
   

  	
  8. 3.

  	
  Records and Accounts.

  	
   

  
	
   

  	
  8. 4.

  	
  Financial
  Statements, Certificates and Information.

  	
   

  
	
   

  	
  8. 5.

  	
  Notices.

  	
   

  
	
   

  	
  8. 6.

  	
  Corporate
  Existence; Maintenance of Properties.

  	
   

  
	
   

  	
  8. 7.

  	
  Insurance.

  	
   

  
	
   

  	
  8. 8.

  	
  Taxes.

  	
   

  
	
   

  	
  8. 9.

  	
  Inspection of
  Properties and Books, etc.

  	
   

  
	
   

  	
  8. 10.

  	
  Compliance
  with Laws, Contracts, Licenses, and Permits.

  	
   

  
	
   

  	
  8. 11.

  	
  Employee Benefit Plans.

  	
   

  
	
   

  	
  8. 12.

  	
  Use
  of Proceeds.

  	
   

  
	
   

  	
  8. 13.

  	
  Additional Collateral.

  	
   

  
	
   

  	
  8. 14.

  	
  Further Assurances.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  CERTAIN
  NEGATIVE COVENANTS OF THE BORROWER.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.
  1.

  	
  Restrictions on
  Indebtedness.

  	
   

  
	
   

  	
  9. 2.

  	
  Restrictions on Liens.

  	
   

  
	
   

  	
  9.
  3.

  	
  Restrictions on
  Investments.

  	
   

  
	
   

  	
  9. 4.

  	
  Distributions.

  	
   

  
	
   

  	
  9. 5.

  	
  Merger,
  Consolidation and Disposition of Assets.

  	
   

  
	
   

  	
  9. 6.

  	
  Sale
  and Leaseback.

  	
   

  
	
   

  	
  9. 7.

  	
  Compliance with
  Environmental Laws.

  	
   

  
	
   

  	
  9. 8.

  	
  Employee Benefit Plans.

  	
   

  
	
   

  	
  9. 9.

  	
  Bank
  Accounts.

  	
   

  



 


ii

















 


	
  10.

  	
  FINANCIAL
  COVENANTS OF THE BORROWER.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10. 1.

  	
  Maximum
  Senior Leverage Ratio.

  	
   

  
	
   

  	
  10. 2.

  	
  Maximum
  Total Leverage Ratio.

  	
   

  
	
   

  	
  10. 3.

  	
  Maximum Fixed
  Charge Coverage Ratio.

  	
   

  
	
   

  	
  10. 4.

  	
  Maximum
  Capital Expenditures.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  CLOSING
  CONDITIONS.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11. 1.

  	
  Loan Documents.

  	
   

  
	
   

  	
  11. 2.

  	
  Certified
  Copies of Organizational Documents.

  	
   

  
	
   

  	
  11. 3.

  	
  Corporate
  Action.

  	
   

  
	
   

  	
  11. 4.

  	
  Incumbency
  Certificate.

  	
   

  
	
   

  	
  11. 5.

  	
  Validity of
  Liens.

  	
   

  
	
   

  	
  11. 6.

  	
  Certificates
  of Insurance.

  	
   

  
	
   

  	
  11. 7.

  	
  Financial
  Condition.

  	
   

  
	
   

  	
  11. 8.

  	
  Solvency
  Certificate.

  	
   

  
	
   

  	
  11. 9.

  	
  Opinion of
  Counsel.

  	
   

  
	
   

  	
  11. 10.

  	
  Payment of
  Fees.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  CONDITIONS TO ALL
  BORROWINGS.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12. 1.

  	
  Representations
  True; No Event of Default.

  	
   

  
	
   

  	
  12. 2.

  	
  No Legal
  Impediment.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  EVENTS OF
  DEFAULT; ACCELERATION; ETC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13. 1.

  	
  Events of Default
  and Acceleration.

  	
   

  
	
   

  	
  13. 2.

  	
  Termination
  of Commitments.

  	
   

  
	
   

  	
  13. 3.

  	
  Remedies.

  	
   

  
	
   

  	
  13. 4.

  	
  Distribution of
  Collateral Proceeds.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  SETOFF.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  THE AGENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15. 1.

  	
  Authorization.

  	
   

  
	
   

  	
  15. 2.

  	
  Employees
  and Agents.

  	
   

  
	
   

  	
  15. 3.

  	
  No Liability.

  	
   

  
	
   

  	
  15. 4.

  	
  No
  Representations.

  	
   

  
	
   

  	
  15. 5.

  	
  Payments.

  	
   

  
	
   

  	
  15. 6.

  	
  Holders of
  Notes.

  	
   

  
	
   

  	
  15. 7.

  	
  Indemnity.

  	
   

  
	
   

  	
  15. 8.

  	
  Agent as Bank.

  	
   

  
	
   

  	
  15. 9.

  	
  Resignation.

  	
   

  
	
   

  	
  15. 10.

  	
  Notification
  of Defaults and Events of Default.

  	
   

  
	
   

  	
  15. 11.

  	
  Duties in the Case
  of Enforcement.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  EXPENSES.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  INDEMNIFICATION.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  SURVIVAL OF COVENANTS, ETC.

  	
   

  



 


iii

















 


	
  19.

  	
  ASSIGNMENT AND
  PARTICIPATION.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19. 1.

  	
  Conditions to
  Assignment by Banks.

  	
   

  
	
   

  	
  19. 2.

  	
  Certain
  Representations and Warranties; Limitations; Covenants.

  	
   

  
	
   

  	
  19. 3.

  	
  Register.

  	
   

  
	
   

  	
  19. 4.

  	
  New Notes.

  	
   

  
	
   

  	
  19. 5.

  	
  Participations.

  	
   

  
	
   

  	
  19. 6.

  	
  Disclosure.

  	
   

  
	
   

  	
  19. 7.

  	
  Assignee
  or Participant Affiliated with the Borrower.

  	
   

  
	
   

  	
  19. 8.

  	
  Miscellaneous
  Assignment Provisions.

  	
   

  
	
   

  	
  19. 9.

  	
  Assignment
  by Borrower.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  NOTICES,
  ETC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  GOVERNING
  LAW.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  HEADINGS.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  COUNTERPARTS.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
  ENTIRE AGREEMENT, ETC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
  WAIVER OF JURY TRIAL.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
  CONSENTS,
  AMENDMENTS, WAIVERS, ETC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
  SEVERABILITY.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
  TREATMENT
  OF CERTAIN CONFIDENTIAL INFORMATION.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  28. 1.

  	
  Sharing
  of Information with Section 20 Subsidiary.

  	
   

  
	
   

  	
  28. 2.

  	
  Confidentiality.

  	
   

  
	
   

  	
  28. 3.

  	
  Prior
  Notification.

  	
   

  
	
   

  	
  28. 4.

  	
  Other.

  	
   

  



 


iv

















 


EXHIBITS AND
SCHEDULES


 


	
  Exhibit A

  	
   

  	
  Revolving Credit Note

  	
   

  
	
  Exhibit B

  	
   

  	
  Request for Revolving
  Credit Loans

  	
   

  
	
  Exhibit C

  	
   

  	
  Compliance Certificate

  	
   

  
	
  Exhibit D

  	
   

  	
  Borrowing Base
  Certificate

  	
   

  
	
  Exhibit E

  	
   

  	
  Assignment and
  Acceptance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1

  	
   

  	
  Banks and Commitments

  	
   

  
	
  Schedule 7.3

  	
   

  	
  Exceptions to Title

  	
   

  
	
  Schedule 7.7

  	
   

  	
  Litigation

  	
   

  
	
  Schedule 7.14

  	
   

  	
  Affiliated Transactions

  	
   

  
	
  Schedule 7.18

  	
   

  	
  Subsidiaries

  	
   

  
	
  Schedule 7.19

  	
   

  	
  Bank Accounts

  	
   

  
	
  Schedule 8.7

  	
   

  	
  Insurance

  	
   

  
	
  Schedule 9.1

  	
   

  	
  Existing Indebtedness

  	
   

  
	
  Schedule 9.2

  	
   

  	
  Existing Liens

  	
   

  
	
  Schedule 9.3

  	
   

  	
  Existing Investments

  	
   

  



 


v

















 


REVOLVING CREDIT


AGREEMENT


 


This REVOLVING CREDIT AGREEMENT is
made as of June 30, 2004, by and among (a) WEIDER NUTRITION GROUP, INC., a Utah corporation (the “Borrower”),
(b) KEYBANK NATIONAL ASSOCIATION,
a national banking association and the other financial institutions listed on Schedule 1
hereto and (c) KEYBANK NATIONAL ASSOCIATION,
as agent for itself and such other financial institutions.


 


WHEREAS,
Borrower desires to obtain a revolving line of credit from the Banks in the
amount of TWENTY FIVE MILLION AND NO/100 DOLLARS ($25,000,000) (the “Credit
Facility”); and


 


WHEREAS,
the Banks and the Agent are willing to establish the Credit Facility and make
loans thereunder to Borrower upon the terms and conditions hereinafter set
forth.


 


NOW THEREFORE, to
that end and in consideration of the promises, covenants and agreements
contained herein, and the mutual benefits to be derived from this Agreement,
the parties agree as follows:


 


1.                                      DEFINITIONS AND RULES OF
INTERPRETATION.


 


1. 1.                         Definitions.  The
following terms shall have the meanings set forth in this §1 or elsewhere in
the provisions of this Credit Agreement referred to below:


 


Accounts.  See §2.11 hereof.


 


Account Debtor.  See §2.11 hereof.


 


Affiliate.  Any Person that would be considered to be an
affiliate of the Borrower under Rule 144(a) of the Rules and Regulations of the
Securities and Exchange Commission, as in effect on the date hereof, if the
Borrower were issuing securities.


 


Agent’s Head Office.  The Agent’s office located at 50 South Main
Street, 20th Floor, Salt Lake City, Utah  84144, or at such other location as the Agent may designate from
time to time.


 


Agent.  KeyBank National Association, acting as
agent for the Banks.


 


Agent’s Special Counsel.  Van Cott, Bagley, Cornwall & McCarthy,
P.C., or such other counsel as may be approved by the Agent and that is
reasonably acceptable to the Borrower.


 


Assignment and Acceptance.  See §19.1 hereof.


 


Balance
Sheet Date.  May 31,
2003.


 


Banks.  KeyBank and the other lending institutions
listed on Schedule 1 hereto and any other Person who becomes an
assignee of any rights and obligations of a Bank pursuant to §19 hereof.


 


Base Rate.  The higher of (a) the annual rate of
interest announced from time to time by KeyBank at its office in Cleveland,
Ohio, as its “Prime Rate” and (b) the rate equal to one-half of one percent
(1/2%) above the Federal Funds Effective Rate. 
For the purposes of this definition,


 


1

















 


“Federal Funds Effective
Rate” shall mean for any day, the rate per annum equal to the weighted average
of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business
Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
such day on such transactions received by the Agent from three funds brokers of
recognized standing selected by the Agent.


 


Base Rate Loans.  All or any portion of the Revolving Credit
Loans bearing interest calculated by reference to the Base Rate.


 


Borrower.  As defined in the preamble hereto.


 


Borrowing Base.  See §2.11 hereof.


 


Business Day.  Any day on which banking institutions in
Salt Lake City, Utah, are open for the transaction of banking business and, in
the case of LIBOR Rate Loans, also a day which is a LIBOR Business Day.


 


Capital Leases.  See §10.3 hereof.


 


CERCLA.  See §7.17 hereof.


 


Closing Date.  The first date on which the conditions set
forth in §11 have been satisfied.


 


Code.  The Internal Revenue Code of 1986, as
amended.


 


Collateral.  All of the property, rights and interests of
the Guarantor and the Borrower that are or are intended to be subject to the
security interests created by the Security Documents.


 


Collateral Event.  See §6.2 hereof.


 


Commitment Percentage.  With respect to each Bank, the percentage
set forth on Schedule 1 hereto as such Bank’s percentage of the
aggregate commitments of all of the Banks.


 


Consolidated or
consolidated.  With
reference to any term defined herein, shall mean that term as applied to the
accounts of the Guarantor and its foreign and domestic subsidiaries, or
Borrower and its Subsidiaries, as the case may be, consolidated in accordance
with GAAP.


 


Consolidated EBITDA.  See §10 hereof.


 


Conversion Request.  A notice given by the Borrower to the Agent
of the Borrower’s election to convert or continue a Loan in accordance with
§2.8 hereof.


 


Credit Agreement.  This Revolving Credit Agreement, including
the Schedules and Exhibits hereto.


 


Default.  See §13.1 hereof.


 


Default Rate.  The rate of interest payable after the
occurrence of an Event of Default pursuant to §5.9 hereof.


 


Distribution.  The declaration or payment of any dividend
on or in respect of any shares of any class of capital stock of any Person
other than dividends payable solely in shares of 


 


2

















 


common stock of such
Person; the purchase, redemption, or other retirement by any Person of any
shares of any class of capital stock of such Person, directly or indirectly
through a Subsidiary of such Person or otherwise; the return of capital by any
Person to its shareholders as such; or any other distribution by any Person on
or in respect of any shares of any class of capital stock of such Person.


 


Dollars
or $.  Dollars in lawful currency
of the United States of America.


 


Domestic Lending Office.  Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other
office of such Bank, if any, located within the United States that will be
making or maintaining Base Rate Loans.


 


Drawdown Date.  The date on which any Revolving Credit Loan
is made or is to be made, and the date on which any Revolving Credit Loan is
converted or continued in accordance with §2.8.


 


Drawing Amount.  The amount from time to time that the
beneficiary or beneficiaries may draw under an outstanding Letter of Credit, as
such amount may be reduced from time to time pursuant to the terms of the
Letter of Credit.


 


Effective Date.  June 30, 2004.


 


Eligible Accounts.  See §2.11 hereof.


 


Eligible Inventory.  See §2.11 hereof.


 


EPA.  See §7.17(b) hereof.


 


ERISA.  The Employee Retirement Income Security Act
of 1974, as amended.


 


ERISA Reportable Event.  A reportable event with respect to a
Guaranteed Pension Plan within the meaning of §4043 of ERISA and the
regulations promulgated thereunder as to which the requirement for thirty (30)
days’ prior notice has not been waived.


 


Eligible Assignee.  Any of (a) a commercial bank  or
finance company organized under the laws of the United States, or any State
thereof or the District of Columbia, and having total assets in excess of
$1,000,000,000; (b) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof or the District of
Columbia, and having a net worth of at least $100,000,000, calculated in
accordance with GAAP; (c) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation
and Development (the “OECD”), or a political subdivision of any such country,
and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the United States of
America; and (d) if, but only if, any Event of Default has occurred and is
continuing, any other bank, insurance company, commercial finance company or
other financial institution  or other Person approved by the Agent,
such approval not to be unreasonably withheld.


 


Employee Benefit Plan.  Any employee benefit plan within the meaning
of §3(3) of ERISA maintained or contributed to by the Guarantor, the Borrower
or any of its Subsidiaries, other than a Multiemployer Plan.


 


Environmental Laws.  See §7.17(a) hereof.


 


Event of Default.  See §13.1.


 


3

















 


Excluded Taxes.  See §5.5 hereof.


 


GAAP.  (a) When used in §10, whether directly or
indirectly through reference to a capitalized term used therein, means (i)
generally accepted accounting principles in effect in the United States of
America for the fiscal year ended on the Balance Sheet Date, and (ii) to the
extent consistent with such principles, the accounting practice of the
Guarantor or the Borrower, as the case may be, reflected in its financial
statements for the year ended on the Balance Sheet Date, and (b) when used in
general, other than as provided above, means principles that are (i) consistent
with generally accepted accounting principles as in effect in the United States
of America from time to time, and (ii) consistently applied with past financial
statements of the Guarantor or the Borrower, as the case may be, adopting the
same principles; provided, however, that when used directly or indirectly
through reference to unaudited annual or interim financial statements, GAAP
means principles that are consistent with generally accepted accounting
principles in effect in the United States of America from time to time, except
that (i) certain information and disclosures normally included in financial
statements prepared in accordance with GAAP may have been condensed or omitted
from such financial statements, and (ii) unaudited interim financial statements
could be subject to year-end adjustments.


 


Guaranteed Pension Plan.  Any employee pension benefit plan within the
meaning of §3(2) of ERISA maintained or contributed to by the Guarantor, the
Borrower or any of its Subsidiaries or foreign subsidiaries, the benefits of
which are guaranteed on termination in full or in part by the PBGC pursuant to
Title IV of ERISA, other than a Multiemployer Plan.


 


Guarantor.  Weider Nutrition International, Inc., a
Delaware corporation, the sole shareholder of the Borrower.


 


Guaranty.  That certain Guaranty, dated as of the
Effective Date, made by the Guarantor in favor of the Banks and the Agent
pursuant to which the Guarantor guarantees to the Banks and the Agent the
payment and performance of the Obligations, the form of which shall be
satisfactory to the Agent in its sole discretion.


 


Hazardous Substances.  Any hazardous waste, as defined by 42 U.S.C.
§6903(5), any hazardous substances as defined by 42 U.S.C. §9601(14), any
pollutant or contaminant as defined by 42 U.S.C. §9601(33) and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws.


 


Indebtedness.  All obligations, contingent and otherwise,
that in accordance with GAAP should be classified upon the obligor’s balance
sheet as liabilities, including, without duplication, in any event and whether
or not so classified:  (a) all debt and
similar monetary obligations, whether direct or indirect; (b) all liabilities
secured by any mortgage, pledge, security interest, lien, charge or other
encumbrance existing on property owned or acquired subject thereto, whether or
not the liability secured thereby shall have been assumed; and (c) all
guarantees, endorsements and other contingent obligations whether direct or
indirect in respect of indebtedness of others, including any obligation to
supply funds to or in any manner to invest in, directly or indirectly, the
debtor, to purchase indebtedness, or to assure the owner of indebtedness
against loss, through an agreement to purchase goods, supplies, or services for
the purpose of enabling the debtor to make payment of the indebtedness held by
such owner or otherwise, obligations in respect of interest rate swaps and
other interest rate hedging arrangements and the obligations to reimburse the
issuer in respect of any letters of credit.


 


Interest Payment Date.  (a) As to any Base Rate Loan, the last day
of the calendar quarter in which the Drawdown Date thereof occurs and (b) as to
any LIBOR Rate Loan in respect of which the Interest Period is (i) three (3)
months or less, the last day of such Interest Period, and


 


4

















 


(ii) more than three (3)
months, the date that is three (3) months from the first day of such Interest
Period and, in addition, the last day of such Interest Period.


 


Interest Period.  With respect to each Loan, (a) initially,
the period commencing on the Drawdown Date of such Loan and ending on the last
day of one of the periods set forth below, as selected by the Borrower in a
Loan Request:  (i) for any Base Rate
Loan, the last day of the calendar quarter, and (ii) for any LIBOR Rate Loan,
1, 2, 3 or 6 months; and (b) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such Loan and ending on the
last day of one of the periods set forth above, as selected by the Borrower in
a Conversion Request; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:


 


(A)                              if
any Interest Period with respect to a LIBOR Rate Loan would otherwise end on a
day that is not a LIBOR Business Day, that Interest Period shall be extended to
the next succeeding LIBOR Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding LIBOR
Business Day;


 


(B)                                if
any Interest Period with respect to a Base Rate Loan would end on a day that is
not a Business Day, that Interest Period shall end on the next succeeding
Business Day;


 


(C)                                if
the Borrower shall fail to give notice as provided in §2.8, the Borrower shall
be deemed to have requested a conversion of the affected LIBOR Rate Loan to a
Base Rate Loan and the continuance of all Base Rate Loans as Base Rate Loans on
the last day of the then current Interest Period with respect thereto;


 


(D)                               any
Interest Period relating to any LIBOR Rate Loan that begins on the last LIBOR
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last LIBOR Business Day of a calendar month; and


 


(E)                                 any
Interest Period relating to any LIBOR Rate Loan that would otherwise extend
beyond the Revolving Credit Loan Maturity Date shall end on the Revolving
Credit Loan Maturity Date.


 


Investments.  All expenditures made and all liabilities
incurred (contingently or otherwise) for the acquisition of stock or
Indebtedness of, or for loans, advances, capital contributions or transfers of
property to, or in respect of any guaranties (or other commitments as described
under Indebtedness), or obligations of, any Person.  In determining the aggregate amount of Investments outstanding at
any particular time: (a) the amount of any Investment represented by a guaranty
shall be taken at not less than the principal amount of the obligations guaranteed
and still outstanding; (b) there shall be included as an Investment all
interest accrued with respect to Indebtedness constituting an Investment unless
and until such interest is paid; (c) there shall be deducted in respect of each
such Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.


 


KeyBank.  KeyBank National Association, in its
individual capacity.


 


5

















 


LIBOR Adjusted Rate.  For any day with respect to a LIBOR Rate
Loan, the rate obtained by dividing (a) the LIBOR Rate for such Interest Period
by (b) a percentage equal to 1 minus the stated maximum rate, if any (expressed
as a decimal) at which any lender subject thereto would be required to maintain
reserves under Regulation D of the Board of Governors of the Federal Reserve
System (or any successor or similar regulations relating to such reserve
requirements) against “Eurocurrency Liabilities” (as that term is used in
Regulation D), if such liabilities were outstanding.  The LIBOR Adjusted Rate shall be adjusted automatically on and as
of the effective date of any change in the reserve rate under Regulation D.


 


LIBOR Business Day.  Any day on which commercial banks are open
for international business (including dealings in Dollar deposits) in London or
such other eurodollar interbank market as may be selected by the Agent in its
sole discretion acting in good faith.


 


LIBOR Lending Office.  Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other
office of such Bank, if any, that shall be making or maintaining LIBOR Rate
Loans.


 


LIBOR Rate.  For any Interest Period with respect to a
LIBOR Rate Loan, the rate of interest equal to (a) the average of the rates per
annum (rounded upwards to the nearest whole multiple of 1/16 of one percent per
annum, if such rate is not such a multiple) at which KeyBank’s LIBOR Lending
Office is offered Dollar deposits two (2) LIBOR Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market where the
eurodollar operations of such LIBOR Lending Office are customarily conducted,
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the LIBOR Rate
Loans to which such Interest Period applies, divided by (b) a number
equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable, as
defined by the Federal Reserve Board in 12 C.F.R. Part 204 (Regulation D).


 


LIBOR Rate Loans.  All or any portion of the Revolving Credit
Loans bearing interest calculated by reference to the LIBOR Rate.


 


Letter of Credit.  See §4.1.1 hereof.


 


Letter of Credit
Application.  See
§4.1.1 hereof.


 


Letter of Credit
Participation.  See
§4.1.4 hereof.


 


Loan Documents.  This Credit Agreement, the Note, the Letter
of Credit Applications, the Letters of Credit, the Security Documents, any
interest rate swap or hedging agreement entered into with any of the Banks in
connection herewith, and the other instruments, documents and agreements
executed from time to time in connection herewith.


 


Majority Banks.  As of any date on which there is more than
one Bank, not less than two (2) Banks holding an aggregate of at least
fifty-one percent (51%) of the outstanding principal amount of the Note on such
date; and if no such principal is outstanding, not less than two (2) Banks
whose aggregate Revolving Credit Commitments constitute at least fifty-one
percent (51%) of the sum of the Total Revolving Credit Commitment.


 


Material Adverse Change.
Any change that results in or would reasonably be expected to result in a
Material Adverse Effect.


 


Material Adverse Effect.  A material adverse effect on (a) the
business, operations, results of operations, assets, liabilities or financial
condition of the Guarantor or the Borrower and its Subsidiaries, taken as a
whole, as the case may be, or (b) the ability of Guarantor, or the


 


6

















 


Borrower or its
Subsidiaries to perform their obligations under this Credit Agreement or the
other Loan Documents to which they are a party.


 


Maximum Drawing Amount.  The maximum aggregate amount from time to
time that the beneficiaries may draw under outstanding Letters of Credit.  As of the date hereof, the Maximum Drawing
Amount is a sum equal to Five Million and No/100 Dollars ($5,000,000).


 


Maximum Lawful Rate.
See §5.10 hereof.


 


Multiemployer Plan.  Any multiemployer plan within the meaning of
§3(37) of ERISA maintained or contributed to by the Guarantor, the Borrower or
any of its Subsidiaries.


 


Note.  The Revolving Credit Note.


 


Obligations.  All indebtedness, obligations and
liabilities of the Borrower and its Subsidiaries (joint or several) to any of
the Banks and the Agent, individually or collectively, existing on the date of
this Credit Agreement or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise arising or incurred under this Credit Agreement or any of the other
Loan Documents or in respect of any of the Revolving Credit Loans made or
Reimbursement Obligations incurred or any of the Note, Letter of Credit
Application, Letter of Credit or other instruments at any time evidencing any
thereof.


 


outstanding.  With respect to the Revolving Credit Loans,
the aggregate unpaid principal thereof as of any date of determination.


 


PBGC.  The Pension Benefit Guaranty Corporation
created by §4002 of ERISA and any successor entity or entities having similar
responsibilities.


 


Permitted Acquisition.  See §9.5.1.


 


Permitted Liens.  Liens, security interests and other
encumbrances permitted by §9.2 hereof.


 


Person.  Any individual, corporation, partnership,
trust, unincorporated association, limited liability company, business, or
other legal entity, and any government or any governmental agency or political
subdivision thereof.


 


Real Estate.  All real property at any time owned or
leased (as lessee or sublessee) by the Borrower or any of its Subsidiaries.


 


Record.  The grid attached to a Note, or the
continuation of such grid, or any other similar record, including computer
records, maintained by any Bank with respect to any Revolving Credit Loan
referred to in such Note.


 


Reimbursement Obligations.  The obligations of the Borrower to reimburse
the Agent and the Banks on account of any drawing under any Letter of Credit as
provided in §4.2 hereof.


 


Rental Obligations.  All present or future obligations of the
Borrower or any of its Subsidiaries under any rental agreements or leases of
real or personal property, other than (a) obligations that can be terminated by
the giving of notice without liability to such Borrower or such Subsidiary in
excess of the liability for rent due as of the date on which such notice is
given and under which no penalty or premium is paid as a result of any such
termination, and (b) obligations in respect of Capitalized Leases.


 


7

















 


Revolving Credit
Commitment.  With
respect to each Bank, the amount set forth on Schedule 1 hereto as
the amount of such Bank’s commitment to make Revolving Credit Loans to, and to
participate in the issuance, extension and renewal of Letters of Credit for the
account of, the Borrower, as the same may be reduced from time to time; or if
such commitment is terminated pursuant to the provisions hereof, zero.


 


Revolving Credit Loan(s).  Revolving credit loans made or to be made by
the Banks to the Borrower pursuant to §2 hereof.


 


Revolving Credit Loan
Maturity Date.  That
date which is the earliest of (a) June 30, 2007, and (b) the date on which
the Revolving Credit Commitments of the Banks are terminated pursuant to §13
hereof.


 


Revolving Credit Loan
Request.  See §2.7
hereof.


 


Revolving Credit Note
Record.  A Record with
respect to a Revolving Credit Note.


 


Revolving Credit Notes.  See §2.5 hereof.


 


Security Documents.  The Guaranty, the Stock Pledge Agreement,
and any other instruments, documents and agreements executed and delivered to
the Agent and the Banks from time to time as security for the Obligations.


 


Senior Leverage Ratio.  See §10.1 hereof.


 


Stated Rate.  (i) With respect to the Revolving Credit
Loans, the rate of interest payable pursuant to §2.6 hereof.


 


Stock Pledge Agreement.  The Stock Pledge Agreement, dated as of the
Effective Date, from the Guarantor in favor of the Agent, and in form and
substance satisfactory to the Banks and the Agent.


 


Subsidiary.  Any corporation, association, trust, or
other business entity of which the designated parent shall at any time own
directly or indirectly through another entity at least a majority (by number of
votes) of the outstanding Voting Stock; provided that, where the designated
parent is the Borrower or the Guarantor, the term “Subsidiary” shall mean and
include only those Subsidiaries incorporated or organized under the laws of any
political subdivision of the United States.


 


Total Leverage Ratio.  See §10.2 hereof.


 


Total Revolving Credit
Commitment.  The sum
of the Revolving Credit Commitments of the Banks, as in effect from time to
time.  As of the Closing Date, the Total
Revolving Credit Commitment is $25,000,000.


 


Type.  As to any Revolving Credit Loan, its nature
as a Base Rate Loan or a LIBOR Rate Loan.


 


Uniform Customs.  With respect to any Letter of Credit, the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 or any successor version
thereto adopted by the Agent in the ordinary course of its business as a letter
of credit issuer and in effect at the time of issuance of such Letter of
Credit.


 


8

















 


Unpaid Reimbursement
Obligation.  Any
Reimbursement Obligation for which the Borrower does not reimburse the Agent
and the Banks on the date specified in, and in accordance with, §4.2 hereof.


 


Voting Stock.  Stock or similar interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.


 


WNG Holdings.  See §7.18


 


1. 2.                         Rules
of Interpretation.


 


(a)                                  A
reference to any document or agreement shall include such document or agreement
as amended, modified or supplemented from time to time in accordance with its
terms and the terms of this Credit Agreement.


 


(b)                                 The
singular includes the plural and the plural includes the singular.


 


(c)                                  A
reference to any law includes any amendment or modification to such law.


 


(d)                                 A
reference to any Person includes its permitted successors and permitted
assigns.


 


(e)                                  Accounting
terms not otherwise defined herein have the meanings assigned to them by GAAP
applied on a consistent basis by the accounting entity to which they refer.


 


(f)                                    The
words “include”, “includes” and “including” are not limiting.


 


(g)                                 All
terms not specifically defined herein or by GAAP, which terms are defined in
the Uniform Commercial Code as in effect in the State of Utah, have the
meanings assigned to them therein.


 


(h)                                 Reference
to a particular “§” refers to that section of this Credit Agreement unless
otherwise indicated.


 


(i)                                     The
words “herein”, “hereof”, “hereunder” and words of like import shall refer to
this Credit Agreement as a whole and not to any particular section or
subdivision of this Credit Agreement.


 


9

















 


2.                                      THE REVOLVING CREDIT FACILITY.


 


2. 1.                         Commitment
to Lend.  Subject to the terms and conditions set forth in
this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time
between the Closing Date and the Revolving Credit Loan Maturity Date upon
notice by the Borrower to the Agent given in accordance with §2.7 hereof, such
sums as are requested by the Borrower up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at any one time
equal to such Bank’s Revolving Credit Commitment minus such Bank’s
Commitment Percentage of the sum of all Drawing Amounts and all Unpaid
Reimbursement Obligations, provided that the sum of the outstanding
amount of the Revolving Credit Loans (after giving effect to all amounts
requested) plus all Drawing Amounts and all Unpaid Reimbursement
Obligations shall not at any time exceed the lesser of the Total Revolving
Credit Commitment and, if applicable, the Borrowing Base described in
§2.11.  The Revolving Credit Loans shall
be made pro  rata in accordance with each Bank’s Commitment
Percentage.  Each request for a
Revolving Credit Loan hereunder shall constitute a representation and warranty
by the Borrower that the conditions set forth in §§11 and 12, in the case of
the initial Loans to be made on the Closing Date, and §12, in the case of all
other Revolving Credit Loans, have been satisfied on the date of such request.


 


2. 2.                         Fees.  The
Borrower agrees to pay to the Agent for the accounts of the Banks, unless
otherwise specified below, in accordance with their respective Commitment
Percentages the following fees:


 


2. 2. 1.                                    Closing
Fee.  A one-time closing fee calculated at the rate of one-fifth of one
percent (0.20%) of the Total Revolving Credit Commitment, which fee shall be
due and payable upon the Closing Date.


 


2. 2. 2.                                    Administrative
Fee.  An annual administrative fee in the amount of $15,000 per year,
prorated for any partial year, solely for the account of the Agent.  Said administrative fee shall be due and
payable upon the execution hereof and, thereafter, on each annual anniversary
of the Effective Date, excluding the Revolving Credit Loan Maturity Date.


 


2. 2. 3.                                    Unused
Credit Fee.  An unused credit fee calculated on an amount
equal to the Total Revolving Credit Commitment minus the weighted
average sum of all outstanding Revolving Credit Loans and minus all
Drawing Amounts at a rate determined as a function of the Borrower’s Total
Leverage Ratio, as set forth in the table below.  Said unused credit fee shall be due and payable in arrears on a
quarterly basis, commencing on September 30, 2004, and on the last day of
each December, March, June and September thereafter through and
including the Revolving Credit Loan Maturity Date.


 


	
  TOTAL LEVERAGE

  RATIO

  	
   

  	
  Unused
  Credit

  Fee (bps)

  	
   

  
	
  <
  1.50

  	
   

  	
  25.0

  	
   

  
	
  >1.50
  < 2.00

  	
   

  	
  35.0

  	
   

  
	
  >2.00
  < 2.50

  	
   

  	
  40.0

  	
   

  
	
  >2.50
  < 3.00

  	
   

  	
  50.0

  	
   

  



 


2. 2. 4.            Syndication
Fee.  In the event that the Borrower requests and the Banks approve an
increase in the Total Revolving Credit Commitment pursuant to §2.4, to an
amount exceeding $25,000,000, which increase requires or results in the
syndication of all or a part of the increased Total Revolving Credit
Commitment, a syndication fee for the purposes of


 


10

















 


such
syndication, the amount of which fee shall be mutually agreed upon, in writing,
by the Agent and the Borrower on or before the commencement of such
syndication.


 


2. 3.                         Reduction of Total Revolving
Credit Commitment.  The Borrower shall have the
right at any time and from time to time upon three (3) Business Days prior
written notice to the Agent to reduce by $5,000,000, or a whole multiple of
$1,000,000 in excess thereof, or terminate entirely the Total Revolving Credit
Commitment, whereupon the Revolving Credit Commitments of the Banks shall be
reduced pro rata in accordance with their respective Commitment
Percentages of the amount specified in such notice or, as the case may be,
terminated.  Promptly after receiving
any notice of the Borrower delivered pursuant to this §2.3, the Agent will
notify the Banks of the substance thereof.


 


2. 4.                         Increase
of Total Revolving Credit Commitment.  The Borrower shall
have the right at any time and from time to time upon not less than thirty (30)
days prior written notice to the Agent to request that the Total Revolving
Credit Commitment be increased by $5,000,000, or a whole multiple of $1,000,000
in excess thereof, up to an aggregate amount of $60,000,000, subject only to
credit approval by the Agent and the Banks. 
Upon credit approval by the Agent and the Banks, the Revolving Credit
Commitments of the Banks shall be increased pro rata in accordance with
their respective Commitment Percentages of the amount specified in such notice
or such other amount as may be approved by the Banks.  Promptly after receiving any notice of the Borrower delivered
pursuant to this §2.4, the Agent will notify the Banks of the substance
thereof, and the Banks shall commence promptly the underwriting process.


 


2. 5.                         The
Revolving Credit Note.  The Revolving Credit Loans shall be
evidenced by one or more separate promissory notes of the Borrower in
substantially the form of Exhibit A hereto (individually and
collectively, the “Revolving Credit Note”), dated as of the Effective Date and
completed with appropriate insertions. 
One Revolving Credit Note shall be payable to the order of each Bank in
a principal amount equal to such Bank’s Revolving Credit Commitment or, if
less, the outstanding amount of all Revolving Credit Loans made by such Bank,
plus interest accrued thereon, as set forth below.  The Borrower irrevocably authorizes each Bank to make or cause to
be made, at or about the time of the Drawdown Date of any Revolving Credit Loan
or at the time of receipt of any payment of principal on such Bank’s Revolving
Credit Note, an appropriate notation on such Bank’s Revolving Credit Note
Record reflecting the making of such Revolving Credit Loan or (as the case may
be) the receipt of such payment.  The
outstanding amount of the Revolving Credit Loans set forth on such Bank’s
Revolving Credit Note Record shall be prima  facie evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Bank’s Revolving
Credit Note Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under the Revolving Credit Note to make payments of
principal of or interest on the Revolving Credit Note when due.  Upon receipt of an affidavit of an officer
of a Bank as to the loss, theft, destruction, or mutilation of its Revolving
Credit Note, the Borrower shall issue, in lieu thereof, a replacement Revolving
Credit Note in the same principal amount thereof and of like tenor.  Upon any increase in the Total Revolving
Credit Commitment pursuant to §2.4, the Borrower shall issue one or more
replacement Revolving Credit Notes or allonges to the original Revolving Credit
Notes in the aggregate principal amount of such increased Total Revolving
Credit Commitment.


 


2. 6.                         Interest
on Revolving Credit Loans.  Except as otherwise provided in
§5.9,


 


(a)                                  Each
Base Rate Loan shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the last day of the Interest Period with respect
thereto at a rate per annum equal to the Applicable Base Rate Margin, as set
forth below, plus the Base Rate.


 


11

















 


(b)                                 Each
LIBOR Rate Loan shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the last day of the Interest Period with respect
thereto at a rate per annum equal to the Applicable LIBOR Rate Margin, as set
forth below, plus the LIBOR Rate.


 


(c)                                  The
respective Applicable Base Rate Margin and the Applicable LIBOR Rate Margin
shall be determined as a function of the Borrower’s Total Leverage Ratio, as
set forth below:


 


	
  TOTAL LEVERAGE

  RATIO

  	
   

  	
  Applicable

  Base Rate

  Margin (bps)

  	
   

  	
  Applicable

  LIBOR Rate

  Margin (bps)

  	
   

  
	
  <
  1.50

  	
   

  	
  25.0

  	
   

  	
  165

  	
   

  
	
  >1.50
  < 2.00

  	
   

  	
  37.5

  	
   

  	
  190

  	
   

  
	
  >2.00
  < 2.50

  	
   

  	
  50.0

  	
   

  	
  225

  	
   

  
	
  >2.50
  < 3.00

  	
   

  	
  75.0

  	
   

  	
  265

  	
   

  



 


(d)                                 The
Borrower promises to pay interest on each Revolving Credit Loan in arrears on
each Interest Payment Date with respect thereto.


 


2. 7.                         Requests
for Revolving Credit Loans.  The Borrower shall give to the
Agent written notice in the form of Exhibit B hereto (or
telephonic notice confirmed in a writing in the form of Exhibit B
hereto) of each Revolving Credit Loan requested hereunder (a “Revolving Credit
Loan Request”) as of (a) on or before noon, Mountain Standard Time, on the
Business Day of the proposed Drawdown Date of any Base Rate Loan and (b) no
less than three (3) LIBOR Business Days prior to the proposed Drawdown Date of
any LIBOR Rate Loan; provided that, in any calendar year, the Banks
shall have no obligation to honor more than twenty-four (24) Revolving Credit
Loan Requests hereunder.  Each such
notice shall specify (i) the principal amount of the Revolving Credit Loan
requested, (ii) the proposed Drawdown Date of such Revolving Credit Loan, (iii)
the Interest Period for such Revolving Credit Loan and (iv) the Type of such
Revolving Credit Loan.  Promptly upon
receipt of any such notice, the Agent shall notify each of the Banks thereof.  Each Revolving Credit Loan Request shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to
accept the Revolving Credit Loan requested from the Banks on the proposed
Drawdown Date.  Each Revolving Credit
Loan Request shall be in a minimum aggregate amount of $500,000 or a whole
multiple of $250,000 in excess thereof.


 


2. 8.                         Conversion
Options.


 


2. 8. 1.                                    Conversion
to Different Type of Revolving Credit Loan.  The Borrower may
elect from time to time to convert any outstanding Revolving Credit Loan to a
Revolving Credit Loan of another Type, provided that (a) with respect to
any such conversion, the Borrower shall give the Agent at least three (3)
Business Days prior written notice of such election; (b) with respect to any
such conversion of a LIBOR Rate Loan into a Base Rate Loan, such conversion
shall only be made on the last day of the Interest Period with respect thereto
and (c) no Revolving Credit Loan may be converted into a LIBOR Rate Loan when
any Default or Event of Default has occurred and is continuing.  On the date on which such conversion is
being made, each Bank shall take such action as is necessary to transfer its
Commitment Percentage of such Revolving Credit Loans to its Domestic Lending
Office or its LIBOR Lending Office, as the case may be.  All or any part of the outstanding Revolving
Credit Loans of any Type may be converted into a Revolving Credit Loan of
another Type as provided herein, provided that any partial conversion
shall be in an aggregate principal amount of $500,000 or a whole multiple of


 


12

















 


$500,000 in excess
thereof.  Each Conversion Request
relating to the conversion of a Revolving Credit Loan to a LIBOR Rate Loan
shall be irrevocable by the Borrower.


 


2. 8. 2.                                    Continuation
of LIBOR Rate Loans.  Any LIBOR Rate Loan may be continued as
a LIBOR Rate Loan upon the expiration of an Interest Period with respect
thereto by compliance by the Borrower with the notice provisions contained in
§2.8.1; provided that no LIBOR Rate Loan may be continued as such when
any Default or Event of Default has occurred and is continuing, but shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto ending during the continuance of any Default
or Event of Default of which officers of the Agent active upon the Borrower’s
account have actual knowledge.  The
Agent shall notify the Banks promptly when any such automatic conversion
contemplated by this §2.8.2 is scheduled to occur.  If Borrower does not request conversion or continuation of any
LIBOR Rate Loan and such LIBOR Rate Loan remains outstanding upon the
expiration of the last Interest Period with respect thereto, such LIBOR Rate
Loan shall automatically be converted to a Base Rate Loan on the last day of
such Interest Period.


 


2. 8. 3.                                    LIBOR
Rate Loans.  Any conversion to or from LIBOR Rate Loans shall
be in such amounts and be made pursuant to such elections so that, after giving
effect thereto, (a) the aggregate principal amount of all LIBOR Rate Loans
having the same Interest Period shall not be less than $1,000,000 or a whole
multiple of $500,000 in excess thereof, and (b) there shall not be more than
ten (10) different Interest Periods with respect to LIBOR Rate Loans in effect
at any one time.


 


2. 9.                         Funds
for Revolving Credit Loan.


 


2. 9. 1.                                    Funding
Procedures.  Not later than 1:00 p.m. (Salt Lake City time)
on the proposed Drawdown Date of any Revolving Credit Loans, each of the Banks
will make available to the Agent, at Agent’s Head Office, in immediately
available funds, the amount of such Bank’s Commitment Percentage of the amount
of the requested Revolving Credit Loans. 
Upon receipt from each Bank of such amount, and upon receipt of the
documents required by §§11 and 12 and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Agent will make available to
the Borrower the aggregate amount of such Revolving Credit Loans made available
to the Agent by the Banks.  The failure
or refusal of any Bank to make available to the Agent at the aforesaid time and
place on any Drawdown Date the amount of its Commitment Percentage of the
requested Revolving Credit Loans shall not relieve any other Bank from its
several obligation hereunder to make available to the Agent the amount of such
other Bank’s Commitment Percentage of any requested Revolving Credit Loans.


 


2. 9. 2.                                    Advances
by Agent.  The Agent may, unless notified to the contrary by
any Bank prior to a Drawdown Date, assume that such Bank has made available to
the Agent on such Drawdown Date the amount of such Bank’s Commitment Percentage
of the Revolving Credit Loans to be made on such Drawdown Date, and the Agent
may (but it shall not be required to), in reliance upon such assumption, make
available to the Borrower a corresponding amount.  If any Bank makes available to the Agent such amount on a date
after such Drawdown Date, such Bank shall pay to the Agent on demand an amount
equal to the product of (a) the average computed for the period referred to in
clause (c) below, of the weighted average interest rate paid by the Agent for
federal funds acquired by the Agent during each day included in such period, times
(b) the amount of such Bank’s Commitment Percentage of such Revolving Credit
Loans, times (c) a fraction, the numerator of which is the number of
days that elapse from and including such Drawdown Date to the date on which the
amount of such Bank’s Commitment Percentage of such Revolving Credit Loans
shall become immediately available to the Agent, and the denominator of which
is 365.  A statement of the Agent
submitted to such Bank with respect to any amounts owing under this paragraph
shall be prima  facie evidence of the amount due and owing to the
Agent by such Bank.  If the amount of
such Bank’s


 


13

















 


Commitment Percentage of
such Revolving Credit Loans is not made available to the Agent by such Bank
within three (3) Business Days following such Drawdown Date, the Agent shall be
entitled to recover such amount from the Borrower on demand, with interest
thereon at the rate per annum applicable to the Revolving Credit Loans made on
such Drawdown Date.


 


2. 10.                  Repayment of
the Revolving Credit Loans.


 


2. 10. 1.                             Maturity.  The
Borrower promises to pay on the Revolving Credit Loan Maturity Date, and there
shall become absolutely due and payable on the Revolving Credit Loan Maturity
Date, all of the Revolving Credit Loans outstanding on such date, together with
any and all accrued and unpaid interest thereon and any accrued but unpaid
unused credit fee.


 


2.
10. 2.                             Extension
of Maturity Date.  Provided that
no Event of Default has occurred and is continuing, and subject to the approval
of the Banks and the Agent, which approval shall not be unreasonably withheld,
the Borrower may request in writing, delivered to the Agent not less than
thirty (30) days prior to the second anniversary of the Effective Date, that
the Revolving Credit Maturity Date be extended for one additional year beyond
the then effective Revolving Credit Maturity Date.  Thereafter, the Borrower may make additional such requests on or
prior to each consecutive anniversary of the Effective Date.


 


2. 10. 3.                             Mandatory
Repayments of Revolving Credit Loans.  If at any time the sum
of the outstanding amount of the Revolving Credit Loans, all Drawing Amounts
and all Unpaid Reimbursement Obligations exceeds the Total Revolving Credit
Commitment, then the Borrower shall immediately pay the amount of such excess
to the Agent for the respective accounts of the Banks for application:  first, to any Unpaid Reimbursement
Obligations; second, to the Revolving Credit Loans; and third, to
provide to the Agent cash collateral for Reimbursement Obligations as
contemplated by §4.2(b) and (c) hereof. 
Each payment of any Unpaid Reimbursement Obligations or prepayment of
Revolving Credit Loans shall be allocated among the Banks, in proportion, as
nearly as practicable, to each Reimbursement Obligation or (as the case may be)
the respective unpaid principal amount of each Bank’s Revolving Credit Note,
with adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.


 


2. 10. 4.                             Optional
Repayments of Revolving Credit Loans.  The Borrower shall
have the right, at their election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that, except as otherwise permitted in this §2.10.4,
any full or partial prepayment of the outstanding amount of any LIBOR Rate
Loans pursuant to this §2.10.4 may be made only on the last day of the Interest
Period relating thereto.  The Borrower
shall give the Agent, no later than 12:00 noon (Salt Lake City time) at
least one (1) Business Day prior written notice of any proposed prepayment
pursuant to this §2.10.4 of Base Rate Loans, and one (1) LIBOR Business Day
notice of any proposed prepayment pursuant to this §2.10.4 of LIBOR Rate Loans,
in each case specifying the proposed date of prepayment of Revolving Credit
Loans and the principal amount to be prepaid. 
Each such partial prepayment of the Revolving Credit Loans shall be in
an integral multiple of $100,000, shall be accompanied by the payment of
accrued interest on the principal prepaid to the date of prepayment, and, if
such prepayment is of a LIBOR Rate Loan and is made on a date other than the
last day of the Interest Period relating thereto, such prepayment shall be
further accompanied by indemnification payments pursuant to §5.8 hereof, and
shall be applied, in the absence of instruction by the Borrower, first,
to the principal of Base Rate Loans and then to the principal of LIBOR
Rate Loans.  Each partial prepayment
shall be allocated amongst the Banks, in proportion, as nearly as practicable,
to the respective unpaid principal amount of each Bank’s Revolving Credit Note,
with adjustments to the extent practicable to equalize any prior repayments not
exactly in proportion.


 


14

















 


2. 11.                  Borrowing
Base.  The term “Borrowing Base” means an amount equal to the sum of (a)
eighty five percent (85%) of the value of all Eligible Accounts (as defined
below), plus (b) sixty five percent (65%) of all Eligible Inventory (as defined
below).  Provided
that, if the Borrower’s Senior Leverage Ratio is less than 1.75:1.00 and
the Borrower’s ratio of current assets to current liabilities is greater than
1.50:1.00, the Revolving Credit Loans and Letters of Credit to be issued
hereunder shall not be subject to any Borrowing Base.  In the event that Borrower fails to maintain at any time one or
both of such ratios, then, as set forth in §2.1, the sum of the
outstanding amount of the Revolving Credit Loans (after giving effect to all
amounts requested) plus all Drawing Amounts and all Unpaid Reimbursement
Obligations shall not at any time exceed the lesser of the Total Revolving
Credit Commitment and the Borrowing Base.


 


2.
11. 1                                Eligible Accounts.  For purposes of this Credit Agreement,
the term “Accounts” means all of the Borrower’s and its Subsidiaries’ trade
accounts, accounts receivable, other receivables, or rights to payment for
goods or services owing to the Borrower or its Subsidiaries; the term “Eligible
Accounts” means all of the Borrower’s and its Subsidiaries’ Accounts which
contain selling terms and conditions reasonably acceptable to the Agent; and
the term “Account Debtor” means any Person obligated on an Account.  The net amount of any Eligible Account
against which Borrower may borrow shall exclude all returns, discounts, credits,
and offsets of any nature.  Unless
otherwise agreed to by the Agent in writing, Eligible Accounts do not include:


 


(a)                                  Accounts
with respect to which the Account Debtor is an employee or agent of the
Borrower.


 


(b)                                 Accounts
with respect to which the Account Debtor is a subsidiary of, or affiliated with
Borrower or its shareholders, officers, or directors.


 


(c)                                  Accounts
with respect to which goods are placed on consignment, guaranteed sale, or
other terms by reason of which the payment by the Account Debtor may be
conditional.


 


(d)                                 Accounts
with respect to which the Account Debtor is not a resident of the United
States, except (i) to the extent such Accounts are supported by letters of
credit, insurance, bonds or other assurances satisfactory to the Agent, or (ii)
to the extent that the Account Debtor on such Accounts is an affiliate of
Wal-Mart Stores, Inc., or Costco Wholesale Corporation.


 


(e)                                  Accounts
with respect to which Borrower is or may become liable to the Account Debtor
for goods sold or services previously rendered by the Account Debtor to the
Borrower; provided, however, that any Account deemed ineligible pursuant to
this clause (e) shall only be ineligible to the extent of such liability, and
the remainder shall constitute an Eligible Account.


 


(f)                                    Accounts
which are subject to dispute, counterclaim, or setoff.


 


(g)                                 Accounts
with respect to which the goods have not been shipped or delivered, or the
services have not been rendered, to the Account Debtor.


 


(h)                                 Accounts
with respect to which the Agent, in its sole discretion acting in good faith
after reasonable inquiry, deems the creditworthiness of financial condition of
the Account Debtor to be unsatisfactory.


 


(i)                                     Accounts
of any Account Debtor who has filed or has had filed against it a petition in
bankruptcy or an application for relief under any provision of any state or


 


15

















 


federal bankruptcy,
insolvency, or debtor-in-relief acts; or who has had appointed a trustee,
custodian, or receiver for the assets of such Account Debtor; or who has made
an assignment for the benefit of creditors or has become insolvent or fails
generally to pay its debts (including its payrolls) as such debts become due.


 


(j)                                     Accounts
with respect to which the Account Debtor is the United States government or any
department or agency of the United States.


 


(k)                                  Accounts
which have not been paid in full within ninety (90) days from the invoice
date.  The entire balance of any Account
of any single Account Debtor will be ineligible whenever the portion of the
Account which has not been paid within 90 days from the invoice date is in
excess of fifty percent (50%) of the total amount outstanding on the Account.


 


(l)                                     That
portion of the Accounts of any single Account Debtor which exceeds fifteen
percent (15%) of all of the Borrower’s Accounts provided that, the foregoing
concentration limit shall not apply to Account Debtors Wal-Mart Stores, Inc.,
and Costco Wholesale Corporation or any of their respective affiliates.


 


(m)                               That
portion of the Accounts of any single Account Debtor that is subject to
retainage;


 


2.
11. 2                                Eligible Inventory.  For purposes of this Agreement, the term
“Eligible Inventory” means all of the Borrower’s raw materials, finished goods,
merchandise, parts and supplies, of every kind and description, and goods held
for sale or lease or furnished under contracts of service in which the Borrower
has or hereafter acquires any right, whether held by the Borrower or others,
and all documents of title, warehouse receipts, bills of lading, and all other
documents of every type covering all or any part of the foregoing, except:


 


(a)                                  Inventory
which is not owned by the Borrower free and clear of all security interest,
liens, encumbrances, and claims of third parties, other than inventory in which
the Agent, for the ratable benefit of the Banks, holds a valid and perfected
first priority lien.


 


(b)                                 Inventory
which the Agent, in its sole discretion acting in good faith after reasonable
inquiry, deems to be obsolete, unsalable, damaged, defective, or unfit for
further processing.


 


(c)                                  Work
in process.


 


(d)                                 Inventory
which is held or maintained outside of the United States.


 


3.                                      [INTENTIONALLY OMITTED]


 


4.                                      LETTERS OF CREDIT.


 


4. 1.                         Letter
of Credit Commitments.


 


4. 1. 1.                                    Commitment
to Issue Letters of Credit.  Subject to the terms and
conditions hereof and the execution and delivery by the Borrower of a letter of
credit application on the Agent’s customary form (a “Letter of Credit
Application”), the Agent on behalf of the Banks and in reliance upon the
agreement of the Banks set forth in §4.1.4 and upon the


 


16

















 


representations and
warranties of the Borrower contained herein, agrees, in its individual
capacity, to issue, extend and renew for the account of the Borrower one or
more standby or documentary letters of credit (individually, a “Letter of
Credit”), in such form as may be requested from time to time by the Borrower
and agreed to by the Agent; provided, however, that, after giving
effect to such request, the sum of (A) all Drawing Amounts on all Letters of
Credit plus and Unpaid Reimbursement Amounts shall not exceed the Maximum
Drawing Amount, and (B) (i) all Drawing Amounts on all Letters of Credit, (ii)
all Unpaid Reimbursement Obligations, and (iii) the amount of all Revolving
Credit Loans outstanding shall not exceed the Total Revolving Credit
Commitment.  Notwithstanding the
foregoing, the Agent shall have no obligation to issue any Letter of Credit to
support or secure any Indebtedness of the Borrower or any of its Subsidiaries
to the extent that such Indebtedness was incurred prior to the proposed
issuance date of such Letter of Credit, unless in any such case the Borrower
demonstrates to the reasonable satisfaction of the Agent that (A) such prior
incurred Indebtedness was then fully secured by a prior perfected and
unavoidable security interest in collateral provided by the Borrower or such
Subsidiary to the proposed beneficiary of such Letter of Credit or (B) such prior
incurred Indebtedness was then secured or supported by a letter of credit
issued for the account of the Borrower or such Subsidiary and the reimbursement
obligation with respect to such letter of credit was fully secured by a prior
perfected and unavoidable security interest in collateral provided to the
issuer of such letter of credit by the Borrower or such Subsidiary.


 


4. 1. 2.                                    Letter
of Credit Applications.  Each Letter of Credit Application
shall be completed to the satisfaction of the Agent.  In the event that any provision of any Letter of Credit
Application shall be inconsistent with any provision of this Credit Agreement,
then the provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.


 


4. 1. 3.                                    Terms
of Letters of Credit.  Each Letter of Credit issued, extended
or renewed hereunder shall, among other things, (a) provide for the payment of
sight drafts for honor thereunder when presented in accordance with the terms
thereof and when accompanied by the documents described therein, and (b) have
an expiry date no later than the date which is the earlier of (i) one (1) year
from the date of issuance, extension or renewal thereof and (ii) fourteen (14)
days (or, if the beneficiary is located outside of the United States of
America, forty-five (45) days) prior to the Revolving Credit Loan Maturity
Date.  Each Letter of Credit so issued,
extended or renewed shall be subject to the Uniform Customs.


 


4. 1. 4.                                    Reimbursement
Obligations of Banks.  Each Bank severally agrees that it
shall be absolutely liable, without regard to the occurrence of any Default or
Event of Default or any other condition precedent whatsoever, to the extent of
such Bank’s Commitment Percentage, to reimburse the Agent on demand for the
amount of each draft paid by the Agent under each Letter of Credit to the
extent that such amount is not reimbursed by the Borrower pursuant to §4.2
(such agreement by a Bank being called herein the “Letter of Credit
Participation” of such Bank).


 


4. 1. 5.                                    Participations
of Banks.  Each such payment made by a Bank shall be treated
as the purchase by such Bank of a participating interest in the Borrower’s
Reimbursement Obligation under §4.2 in an amount equal to such payment.  Each Bank shall share in accordance with its
participating interest in any interest which accrues pursuant to §4.2.


 


4. 2.                         Reimbursement
Obligations of the Borrower.  In order to induce the Agent to
issue, extend and renew each Letter of Credit and the Banks to participate
therein, the Borrower hereby agrees to reimburse or pay to the Agent, for the
account of the Agent or (as the case may be) the Banks, with respect to each
Letter of Credit issued, extended or renewed by the Agent hereunder,


 


17

















 


(a)                                  except
as otherwise expressly provided in §4.2(b) and (c), on each date that any draft
presented under such Letter of Credit is honored by the Agent in compliance
with §4.3, or the Agent otherwise makes a payment with respect thereto, (i) the
amount paid by the Agent under or with respect to such Letter of Credit, and
(ii) the amount of any taxes, fees, charges or other costs and expenses
whatsoever incurred by the Agent or any Bank in connection with any payment
made by the Agent or any Bank under, or with respect to, such Letter of Credit,


 


(b)                                 upon
the reduction (but not termination) of the Total Revolving Credit Commitment to
an amount less than all Drawing Amounts on all Letters of Credit, an amount
equal to such difference, which amount shall be held by the Agent for the
benefit of the Banks and the Agent as cash collateral for all Reimbursement
Obligations, and


 


(c)                                  upon
the termination of the Total Revolving Credit Commitment, or the acceleration
of the Reimbursement Obligations with respect to all Letters of Credit in
accordance with §13, an amount equal to all Drawing Amounts on all Letters of
Credit, which amount shall be held by the Agent for the benefit of the Banks
and the Agent as cash collateral for all Reimbursement Obligations.


 


Each such payment shall
be made to the Agent at the Agent’s Head Office in immediately available
funds.  Interest on any and all amounts
remaining unpaid by the Borrower under this §4.2 at any time from the date such
amounts become due and payable (whether as stated in this §4.2, by acceleration
or otherwise) until payment in full (whether before or after judgment) shall be
payable to the Agent on demand at the rate specified in §5.9 for overdue
principal on the Revolving Credit Loans.


 


4. 3.                         Letter
of Credit Payments.  If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Borrower of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor
such demand for payment.  If the
Borrower fails to reimburse the Agent as provided in §4.2 on or before the date
that such draft is paid or other payment is made by the Agent, the Agent may at
any time thereafter notify the Banks of the amount of any such Unpaid
Reimbursement Obligation.  No later than
3:00 p.m. (Salt Lake City time) on the Business Day next following the receipt
of such notice, each Bank shall make available to the Agent, at its Head
Office, in immediately available funds, such Bank’s Commitment Percentage of
such Unpaid Reimbursement Obligation, together with an amount equal to the
product of (a) the average, computed for the period referred to in clause (c)
below, of the weighted average interest rate paid by the Agent for federal
funds acquired by the Agent during each day included in such period, times
(b) the amount equal to such Bank’s Commitment Percentage of such Unpaid
Reimbursement Obligation, times (c) a fraction, the numerator of which
is the number of days that elapse from and including the date the Agent paid
the draft presented for honor or otherwise made payment to the date on which
such Bank’s Commitment Percentage of such Unpaid Reimbursement Obligation shall
become immediately available to the Agent, and the denominator of which is
365.  The responsibility of the Agent to
the Borrower and the Banks shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit.


 


4. 4.                         Obligations
Absolute.  The Borrower’s obligations under this §4 shall be
absolute and unconditional under any and all circumstances and irrespective of
the occurrence of any Default or Event of Default or any condition precedent
whatsoever or any setoff, counterclaim or defense to payment which the Borrower
may have or have had against the Agent, any Bank or any beneficiary of a Letter
of Credit.  The Borrower further agrees
with the Agent and the Banks that the Agent and the Banks shall not be
responsible for, and the


 


18

















 


Borrower’s Reimbursement
Obligations under §4.2 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even if
such documents should in fact prove to be in any or all respects invalid,
fraudulent or forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financing institution or other party
to which any Letter of Credit may be transferred or any claims or defenses
whatsoever of the Borrower against the beneficiary of any Letter of Credit or
any such transferee.  The Agent and the
Banks shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit.  The Borrower agrees that any action taken or omitted by the Agent
or any Bank under or in connection with each Letter of Credit and the related
drafts and documents, if done in good faith and in compliance with §4.3, shall
be binding upon the Borrower and shall not result in any liability on the part
of the Agent or any Bank to the Borrower.


 


4. 5.                         Reliance
by Issuer.  To the extent not inconsistent with the foregoing
§4.4, the Agent shall be entitled to rely, and shall be fully protected in
relying upon, any Letter of Credit, draft, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex
or teletype message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent.  The Agent shall be fully justified in failing or refusing to take
any action under this Agreement unless it shall first have received such advice
or concurrence of the Majority Banks as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by the Banks against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. 
The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of
the Majority Banks, and such request and any action taken or failed to be taken
pursuant thereto shall be binding upon the Banks and all future holders of the
Revolving Credit Notes or of a Letter of Credit Participation.


 


4. 6.                         Letter
of Credit Fee.  The Borrower shall, on the date of issuance
or any extension or renewal of any Letter of Credit and at such other time or
times as such fees are customarily charged by the Agent, pay a fee (in each
case, a “Letter of Credit Fee”) to the Agent as follows:


 


(a)                                  In
respect of each standby Letter of Credit issued, extended or renewed hereunder
such Letter of Credit Fee shall be equal to the then-effective Applicable LIBOR
Rate Margin per annum of the Drawing Amount of such standby Letter of Credit
and shall be for the pro-rata accounts of the Banks in accordance
with their respective Commitment Percentages;


 


(b)                                 In
respect of each documentary Letter of Credit issued, extended or renewed
hereunder such Letter of Credit Fee shall be equal to one and one half percent
(1.5%) per annum of the Drawing Amount of such documentary Letter of Credit and
shall be for the pro-rata accounts of the Banks in accordance
with their respective Commitment Percentages; and


 


(c)                                  Further,
the Borrower agrees to pay to the Agent for its own account in respect of each
Letter of Credit issued, extended or renewed hereunder, the Agent’s standard
issuance, amendment, negotiation, document examination and other customary fees
as in effect from time to time.


 


19

















 


5.                                      CERTAIN GENERAL PROVISIONS.


 


5. 1.                         Funds
for Payments.


 


5. 1. 1.                                    Payments
to Agent.  All payments of principal, interest, Reimbursement
Obligations, fees, Letter of Credit Fees and any other amounts due hereunder or
under any of the other Loan Documents shall be made to the Agent, for the
respective accounts of the Banks and the Agent, at the Agent’s Head Office or
at such other location that the Agent may from time to time designate, in each
case in immediately available funds.


 


5. 1. 2.                                    No
Offset, etc.  All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made without setoff or counterclaim
and free and clear of and without deduction for any taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory loans, restrictions
or conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other authority
therein unless the Borrower is compelled by law to make such deduction or
withholding.  If any such obligation is
imposed upon the Borrower with respect to any amount payable by it hereunder or
under any of the other Loan Documents, the Borrower will pay to the Agent, for
the account of the Banks or (as the case may be) the Agent, on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable the
Banks or the Agent to receive the same net amount which the Banks or the Agent
would have received on such due date had no such obligation been imposed upon
the Borrower.  The Borrower will deliver
promptly to the Agent certificates or other valid vouchers for all taxes or
other charges deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document.


 


5. 2.                         Computations.  All
computations of interest on the Revolving Credit Loans and unused credit fees,
Letter of Credit Fees,  and all other fees due hereunder shall, unless
otherwise expressly provided herein, be based on a 360-day year and paid for
the actual number of days elapsed. 
Except as otherwise provided in the definition of the term “Interest
Period” with respect to LIBOR Rate Loans, whenever a payment hereunder or under
any of the other Loan Documents becomes due on a day that is not a Business
Day, the due date for such payment shall be extended to the next succeeding
Business Day, and interest shall accrue during such extension.  The outstanding amount of the Revolving
Credit Loans as reflected on the Note Records from time to time shall be
considered correct and binding, absent manifest error, on the Borrower unless
within thirty (30) Business Days after receipt by the Chief Financial Officer
of the Borrower of any written notice by the Agent or any of the Banks of such
outstanding amount, (a) the Agent or such Bank shall notify the Borrower to the
contrary, or (b) the Borrower shall reasonably object, in writing to the Agent,
to such amount.


 


5. 3.                         Inability
to Determine LIBOR Rate.  In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent,
acting in good faith after reasonable inquiry, shall determine that adequate
and reasonable methods do not exist for ascertaining the LIBOR Rate that would
otherwise determine the rate of interest to be applicable to any LIBOR Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. 
In such event (a) any Revolving Credit Loan Request or Conversion Request
with respect to any LIBOR Rate Loans shall be automatically withdrawn and shall
be deemed a request for Base Rate Loans, (b) each LIBOR Rate Loan will
automatically, on the last day of the then current Interest Period relating
thereto, become a Base Rate Loan, and (c) the obligations of the Banks to make
LIBOR Rate Loans shall be suspended until the Agent reasonably determines that
the circumstances giving rise to such suspension no longer exist, whereupon the
Agent shall so notify the Borrower and the Banks.


 


20

















 


5. 4.                         Illegality.  Notwithstanding
any other provisions herein, if any present or future law, regulation, treaty
or directive or in the interpretation or application thereof shall make it
unlawful for any Bank to make or maintain LIBOR Rate Loans, such Bank shall
forthwith give notice of such circumstances to the Borrower and the other Banks
and thereupon (a) the commitment of such Bank to make LIBOR Rate Loans or
convert Revolving Credit Loans of another Type to LIBOR Rate Loans shall
forthwith be suspended and (b) such Bank’s Revolving Credit Loans then
outstanding as LIBOR Rate Loans, if any, shall be converted automatically to
Base Rate Loans on the last day of each Interest Period applicable to such
LIBOR Rate Loans or within such earlier period as may be required by law.


 


5. 5.                         Additional
Costs, etc.  If any present or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at
any time or from time to time hereafter made upon or otherwise issued to any
Bank or the Agent by any central bank or other fiscal, monetary or other
authority (whether or not having the force of law), shall:


 


(a)                                  subject
any Bank or the Agent to any tax, levy, impost, duty, charge, fee, deduction or
withholdings of any nature with respect to this Credit Agreement, the other
Loan Documents, any Letters of Credit, such Bank’s Revolving Credit Commitment
or the Revolving Credit Loans (other than taxes based upon or measured with
reference to the net income or profits of such Bank or the Agent (hereinafter,
“Excluded Taxes”)), or


 


(b)                                 materially
change the basis of taxation (except for changes in Excluded Taxes) of payments
to any Bank of the principal of or the interest on any Revolving Credit Loans
or any other amounts payable to any Bank or the Agent under this Credit
Agreement or any of the other Loan Documents, or


 


(c)                                  impose
or increase or render applicable (other than to the extent specifically
provided for elsewhere in this Credit Agreement) any special deposit, reserve,
assessment, liquidity, capital adequacy or other similar requirements (whether
or not having the force of law) against assets held by, or deposits in or for
the account of, or loans by, or letters of credit issued by, or commitments of
an office of any Bank, or


 


(d)                                 impose
on any Bank or the Agent any other conditions or requirements with respect to
this Credit Agreement, the other Loan Documents, any Letters of Credit, the
Revolving Credit Loans, such Bank’s Revolving Credit Commitment, or any class
of loans, letters of credit or commitments of which any of the Revolving Credit
Loans or such Bank’s Revolving Credit Commitment forms a part, and the result
of any of the foregoing is


 


(i)                                     to
increase the cost to any Bank of making, funding, issuing, renewing, extending
or maintaining any of the Revolving Credit Loans or such Bank’s Revolving
Credit Commitment or any Letter of Credit, or


 


(ii)                                  to
reduce the amount of principal, interest, Reimbursement Obligation or other
amount payable to such Bank or the Agent hereunder on account of such Bank’s
Revolving Credit Commitment, any Letter of Credit or any of the Revolving
Credit Loans, or


 


(iii)                               to
require such Bank or the Agent to make any payment or to forego any interest or
Reimbursement Obligation or other sum payable hereunder, the amount of which
payment or foregone interest or Reimbursement Obligation


 


21

















 


or other sum is
calculated by reference to the gross amount of any sum receivable or deemed
received by such Bank or the Agent from the Borrower hereunder,


 


then, and in each such
case, the Borrower will, upon demand made by such Bank or (as the case may be)
the Agent at any time and from time to time and as often as the occasion
therefor may arise, pay to such Bank or the Agent such additional amounts as
will be sufficient to compensate such Bank or the Agent for such additional
cost, reduction, payment or foregone interest or Reimbursement Obligation or
other sum.


 


5. 6.                         Capital
Adequacy.  If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank’s or the Agent’s commitment with
respect to any Revolving Credit Loans to a level below that which such Bank or
the Agent could have achieved but for such adoption, change or compliance
(taking into consideration such Bank’s or the Agent’s then existing policies
with respect to capital adequacy and assuming full utilization of such entity’s
capital) by any amount reasonably deemed by such Bank or (as the case may be)
the Agent to be material, then such Bank or the Agent may notify the Borrower
of such fact.  To the extent that the
amount of such reduction in the return on capital is not reflected in the Base
Rate, the Borrower and such Bank shall thereafter attempt to negotiate in good
faith, within thirty (30) days of the day on which the Borrower receives such
notice, an adjustment payable hereunder that will adequately compensate such
Bank in light of these circumstances. 
If the Borrower and such Bank are unable to agree to such adjustment
within thirty (30) days of the date on which the Borrower receives such notice,
then commencing on the date of such notice (but not earlier than the effective
date of any such increased capital requirement), the fees payable hereunder
shall increase by an amount that will, in such Bank’s reasonable determination,
provide adequate compensation.  Each
Bank shall allocate such cost increases among its customers in good faith and
on an equitable basis.


 


5. 7.                         Certificate.  A
certificate setting forth any additional amounts payable pursuant to §§5.5 or
5.6 and a brief explanation of such amounts which are due, submitted by any
Bank or the Agent to the Borrower, shall be conclusive, absent manifest error,
that such amounts are due and owing.


 


5. 8.                         Indemnity.  The
Borrower agrees to indemnify each Bank and to hold each Bank harmless from and
against any loss, cost or expense (including loss of anticipated profits) that
such Bank may sustain or incur as a consequence of (a) default by the Borrower
in payment of the principal amount of or any interest on any LIBOR Rate Loans
as and when due and payable, including any such loss or expense arising from
interest or fees payable by such Bank to lenders of funds obtained by it in
order to maintain its LIBOR Rate Loans, (b) default by the Borrower in making a
borrowing or conversion after the Borrower has given (or is deemed to have
given) a Revolving Credit Loan Request or a Conversion Request relating thereto
in accordance with §§2.7 or 2.8, hereof or (c) the making of any payment of a
LIBOR Rate Loan or the making of any conversion of any such Loan to a Base Rate
Loan on a day that is not the last day of the applicable Interest Period with
respect thereto, including interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain any such Loans.


 


22

















 


5. 9.                         Interest
After Default.


 


5. 9. 1.                                    Overdue
Amounts.  Overdue principal and (to the extent permitted by
applicable law) interest on the Revolving Credit Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall bear
interest compounded monthly and payable on demand at a rate per annum equal to
two percent (2%) above the Stated Rate until such amount shall be paid in full
(after as well as before any judgment).


 


5. 9. 2.                                    Amounts
Not Overdue.  During the continuance of an Event of Default
the principal of the Revolving Credit Loans not overdue shall, until such Event
of Default has been cured or remedied or such Event of Default has been waived
by the Majority Banks pursuant to §26, bear interest at a rate per annum equal
to two percent (2%) above the Stated Rate.


 


5. 10.                  Maximum
Lawful Rate.  Notwithstanding anything to the contrary set
forth in this Credit Agreement, if at any time until payment in full of all of
the Obligations, the Stated Rate or the Default Rate contracted for, charged or
otherwise payable hereunder exceeds the highest rate of interest permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto (the “Maximum Lawful Rate”), then in such
event and so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest contracted for, charged or otherwise payable hereunder shall be equal
to the Maximum Lawful Rate; provided, however, that if at any
time the Stated Rate or the Default Rate, as applicable, is less than the Maximum
Lawful Rate, the Borrower shall continue to pay interest hereunder at the
Maximum Lawful Rate until such time as the total interest received by the Banks
from the making of Revolving Credit Loans hereunder is equal to the total
interest which the Banks would have received had the Stated Rate or the Default
Rate otherwise payable hereunder (but for the operation of this §5.10) been the
interest rate payable pursuant to the terms of this Credit Agreement.  Thereafter, the interest rate contracted
for, charged or otherwise payable hereunder shall be the Stated Rate or the
Default Rate, as the case may be, unless and until the then applicable rate
again exceeds the Maximum Lawful Rate, in which event this §5.10 shall again
apply.  In no event shall the total interest
contracted for, charged or otherwise received by the Banks pursuant to the
terms hereof exceed the amount which the Banks could lawfully have received had
the interest due hereunder been calculated for the full term hereof at the
Maximum Lawful Rate.  In the event that
the Maximum Lawful Rate is calculated pursuant to this §5.10, such interest
shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by
the number of days in the year in which such calculation is made.  In the event that a court of competent
jurisdiction, notwithstanding the provisions of this §5.10, shall make a final
determination that any Bank has contracted for, charged or otherwise received
interest hereunder or under any of the other Loan Documents in excess of the
Maximum Lawful Rate, such Bank shall, to the extent permissible by applicable
law, promptly apply such excess first to any interest due and not yet paid
under its Notes, then to the principal amount of its Notes (without premium or
penalty), then to the other unpaid Obligations and thereafter shall refund any
excess to the Borrower or as a court of competent jurisdiction may otherwise
order.


 


6.                                      COLLATERAL SECURITY AND GUARANTIES.


 


6. 1.                         Guaranty
and Security of Guarantor.  The Obligations shall be guaranteed
pursuant to the terms of the Guaranty. 
All of the obligations of the Guarantor under its Guaranty shall be in
turn secured by a perfected first priority security interest (subject only to
Permitted Liens entitled to priority under applicable law) in all of the issued
and outstanding stock of the Borrower, whether now owned or hereafter acquired.


 


23

















 


6. 2.                         Additional
Security of Borrower.  In the event that the Borrower’s Total
Leverage Ratio for any trailing twelve (12) month period ending as of the close
of the Borrower’s most recent fiscal quarter exceeds 2.00:1:00 (a “Collateral
Event”), and only in such event, all of the Obligations shall also be secured
by a perfected first priority security interest (subject only to Permitted
Liens entitled to priority under applicable law) in all of the domestic assets
of the Borrower and the Guarantor, whether now owned or hereafter acquired,
including, without limitation, any capital stock held by the Borrower or the
Guarantor, Real Estate, material leases (together with landlord consents),
accounts, inventory, machinery and equipment, patents, trademarks, tradenames,
copyrights, licenses, royalty agreements, contracts rights, general
intangibles, and letter of credit rights. 
Upon the occurrence of a Collateral Event, the Borrower shall, and shall
cause the Guarantor to, execute and deliver any and all security agreements,
assignments, pledges, mortgages, deeds of trust, and similar documents, and
authorize the filing of all financing statements and other filings, necessary
to grant and perfect such security interests, and to be delivered one or more
favorable legal opinions addressed to the Banks and the Agent, in form and
substance reasonably satisfactory to the Banks and the Agent, from counsel for
the Guarantor and the Borrower.


 


7.                                      REPRESENTATIONS AND WARRANTIES.


 


The Borrower represents
and warrants to the Banks and the Agent as follows:


 


7. 1.                         Corporate Authority.


 


7. 1. 1.                                    Incorporation;
Good Standing.  Each of the Guarantor, Borrower and its
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation, (b) has all requisite
corporate power to own its property and conduct its business as now conducted
and as presently contemplated, and (c) is in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction where
such qualification is necessary except where a failure to be so qualified would
not have a Material Adverse Effect.


 


7. 1. 2.                                    Authorization.  The
execution, delivery and performance of this Credit Agreement and the other Loan
Documents to which any of the Guarantor, the Borrower or any of their
Subsidiaries is or is to become a party and the transactions contemplated
hereby and thereby (a) are within the corporate authority of such Person, (b)
have been duly authorized by all necessary corporate proceedings, (c) do not
conflict with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which such Person is subject or any judgment,
order, writ, injunction, license or permit applicable to such Person and (d) do
not conflict with any provision of the corporate charter or bylaws of, or any
agreement or other instrument binding upon, such Person.


 


7. 1. 3.                                    Enforceability.  The
execution and delivery of this Credit Agreement and the other Loan Documents to
which any of the Guarantor, the Borrower or any of their Subsidiaries is or is
to become a party will result in valid and legally binding obligations of the
Guarantor, the Borrower or such Subsidiary, as the case may be, enforceable
against it in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors’ rights and except to the extent that availability of
the remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding therefor may be brought.


 


7. 2.                         Governmental Approvals.  The execution,
delivery and performance by the Borrower of this Credit Agreement and the other
Loan Documents to which any of the


 


24

















 


Guarantor, Borrower or
any of their Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby do not require the approval or consent of, or
filing with, any governmental agency or authority other than (i) those already
obtained, (ii) the filing by the Guarantor of this Credit Agreement and the
other Loan Documents, if necessary, with the Securities and Exchange
Commission, (iii) any consent, approval or filing required to perfect the security
interests of the Agent, for the ratable benefit of the Banks, set forth in §6.2
upon the occurrence of a Collateral Event, and (iv) any consent, approval or
filing where the failure to obtain such consent or approval or make such filing
would not reasonably be expected to have a Material Adverse Effect.


 


7. 3.                         Title to Properties; Leases.  Except as
indicated on Schedule 7.3 hereto, the Borrower and its Subsidiaries own
all of the assets reflected in the consolidated balance sheet of the Borrower
and its Subsidiaries as at the Balance Sheet Date or acquired since that date
(except property and assets sold or otherwise disposed of in the ordinary
course of business since that date), subject to no rights of others, including
any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances other than Permitted Liens and liens to
be released as a condition precedent to the Closing Date.  The owned assets reflected in such consolidated
balance sheet, and any leased properties are sufficient for the operation of
the Borrower’s business as currently conducted.


 


7. 4.                         Financial Statements; Solvency.


 


7. 4. 1.                                    Financial
Statements.  There has been furnished to each of the Banks
(a) a consolidated balance sheet of the Guarantor as at the Balance Sheet Date,
and a consolidated statement of income of the Guarantor for the fiscal year
then ended (b) the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as at April 30, 2004 and the related unaudited statements of
income for the eleven (11) month period then ended.  Such balance sheets and statements of income have been prepared
in accordance with GAAP and fairly present in accordance with GAAP the
financial condition of the Guarantor and the Borrower and its Subsidiaries as
at the close of business on the respective dates thereof and the results of
operations for the respective fiscal periods then ended.  There are no contingent liabilities of the
Borrower or any of its Subsidiaries as of such date involving material amounts,
known to the officers of the Borrower, which were not disclosed in such balance
sheets and the notes related thereto.


 


7. 4. 2.                                    Solvency.  The
fair saleable value of the assets of each of the Guarantor, the Borrower and
each of its Subsidiaries exceeds its probable liabilities, including those to
be incurred pursuant to this Credit Agreement and the other Loan Documents. The
Guarantor, Borrower and each of its Subsidiaries (a) does not have unreasonably
small capital in relation to the business in which it is, or proposes to be,
engaged and (b) has not incurred, and does not believe that it will incur after
giving effect to the transactions contemplated by this Credit Agreement and the
other Loan Documents, debts beyond its ability to pay such debts as they become
due.


 


7. 5.                         No Material Changes, etc.  Since the
Balance Sheet Date, (a) there has been no Material Adverse Change in the
financial condition or business of the Guarantor, the Borrower, and their
respective Subsidiaries, and (b) Borrower has not made any Distributions.


 


7. 6.                         Franchises, Patents, Copyrights, etc.  The
Borrower and each of its Subsidiaries possesses all franchises, patents,
copyrights, trademarks, trade names, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of its business
substantially as now conducted without known conflict with any rights of
others, except for such conflicts that would not have a Material Adverse
Effect.


 


25

















 


7. 7.                         Litigation.  Except
as set forth in Schedule 7.7 hereto, there are no actions, suits,
proceedings or investigations of any kind pending or, to the knowledge of the
Borrower and its Subsidiaries, threatened against the Borrower or any of its
Subsidiaries before any court, tribunal or administrative agency or board
which, if adversely determined, would be reasonably likely to have, either in
any case or in the aggregate, a Material Adverse Effect.


 


7. 8.                         No Materially Adverse Contracts.  Neither
the Borrower nor any of its Subsidiaries is subject to any contract or
agreement that contains any burdensome restrictions on the Borrower or any
Subsidiary of the Borrower, except for any restrictions that singly, or in the
aggregate, would not reasonably be expected, to have a Material Adverse Effect.


 


7. 9.                         Compliance with Other
Instruments, Laws, etc.  Neither the Borrower nor
any of its Subsidiaries is in violation of any provision of their respective
charter documents, bylaws, or any agreement or instrument to which any of them
are subject or by which any of them or any of their properties are bound or any
decree, order, judgment, statute, license, law, rule or regulation, in any of
the foregoing cases in a manner that would reasonably be expected to have a
Material Adverse Effect.


 


7. 10.                  Tax Status.  The
Borrower and its Subsidiaries (a) have made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which any of them is subject, (b) have paid all taxes and other
governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and by appropriate proceedings and (c) have set aside on their books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply.  As of the Closing Date, there are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Borrower know of no basis for any such
claim.


 


7. 11.                  Holding Company and Investment
Company Acts.  Neither the Borrower nor any of its
Subsidiaries is a “holding company”, or a “subsidiary company” of a “holding
company”, or an “affiliate” of a “holding company”, as such terms are defined
in the Public Utility Holding Company Act of 1935; nor is any of them an
“investment company”, or an “affiliated company” or a “principal underwriter”
of an “investment company”, as such terms are defined in the Investment Company
Act of 1940.


 


7. 12.                  [Intentionally
Omitted]


 


7. 13.                  Perfection of Security Interest.  On or
prior to the Closing Date, all filings, assignments, pledges and deposits of
documents or instruments required to be made by the Guarantor and the Borrower
shall have been made and all other actions required to be taken by the
Guarantor and the Borrower shall have been taken that are necessary or
advisable, under applicable law, to establish and perfect the Agent’s security
interest in the Collateral or arrangements satisfactory to the Agent have been
made to effect all such necessary or advisable filings, assignments, pledges,
deposits and other actions.  The Collateral
and the Agent’s rights with respect to the Collateral are not subject to any
setoff, claims, withholdings or other defenses.  The Guarantor and the Borrower and its Subsidiaries, as
applicable, are the owners of the Collateral described in the Security
Documents to which they are a party free from any lien, security interest,
encumbrance and any other claim or demand, except for Permitted Liens.


 


7. 14.                  Certain Transactions.  Except as set
forth on Schedule 7.14 hereto, none of the officers, directors, or
employees of the Borrower or of any of its Subsidiaries is presently a party to
any transaction or agreement with the Borrower or any of its Subsidiaries
(other than for services as employees, officers and directors), except (a) in
the ordinary course of and pursuant to the reasonable requirements of the
Borrower’s or such Subsidiary’s business and (b) upon fair


 


26

















 


and reasonable terms no
less favorable to the Borrower or such Subsidiary than it could obtain in a
comparable arm’s-length transaction with an unaffiliated Person.


 


7. 15.                  Employee Benefit Plans.


 


7. 15. 1.                             In
General.  Each Employee Benefit Plan has been maintained and
operated in compliance in all material respects with the provisions of ERISA
and, to the extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions.


 


7. 15. 2.                             Terminability
of Welfare Plans.  Under each Employee Benefit Plan which is
an employee welfare benefit plan within the meaning of §3(1) or §3(2)(B) of ERISA,
no benefits are due unless the event giving rise to the benefit entitlement
occurs prior to plan termination (except as required by Title I, Part 6 of
ERISA).  The Guarantor or the Borrower
may terminate each such Plan in accordance with its terms at any time (or at
any time subsequent to the expiration of any applicable bargaining agreement)
in the discretion of the the Guarantor or the Borrower, as the case may be,
without liability to any Person.


 


7. 15. 3.                             Guaranteed
Pension Plans.  Neither the Borrower nor any of its
Subsidiaries maintains or contributes to any Guaranteed Pension Plan.


 


7. 15. 4.                             Multiemployer
Plans.  None of the Guarantor, the Borrower or any of its
Subsidiaries has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under §4201 of ERISA or as a result of
a sale of assets described in §4204 of ERISA. 
None of the Guarantor, the Borrower or any of its Subsidiaries has been
notified that any Multiemployer Plan is in reorganization or insolvent under
and within the meaning of §§4241 or 4245 of ERISA or that any Multiemployer
Plan intends to terminate or has been terminated under §4041A of ERISA.


 


7. 16.                  Tax Shelter
Regulations.  Neither the Guarantor nor the Borrower and
its Subsidiaries intends to treat the Revolving Credit Loans or the
transactions contemplated by this Credit Agreement and the other Loan Documents
as being a “reportable transaction” (within the meaning of Treasury Regulation
§1.6011-4.)  If the Guarantor or the
Borrower or any of its Subsidiaries, or any other party to the Loan Documents
determines to take any action inconsistent with such intention, the Borrower will
promptly notify the Agent thereof.  If
the Borrower so notifies the Agent, the Borrower acknowledges that the Agent or
any Bank may treat the Revolving Credit Loans as part of a transaction that is
subject to Treasury Regulations §301.6112-1, and the Agent or such Bank (as
applicable), will maintain the lists and other records, including the identity
of the party to the Revolving Credit Loans, as required by such Treasury
Regulation.


 


7. 17.                  Environmental Compliance.  The Borrower
has reasonably determined that:


 


(a)                                  neither
the Borrower nor any of its Subsidiaries is in violation (or, to the best of
Borrower’s knowledge, alleged violation) in any material respect, of any
judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under the
Resource Conservation and Recovery Act (“RCRA”), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
(“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986 (“SARA”),
the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances
Control Act, or any state or local statute, regulation, ordinance, order or
decree relating to health, safety or the environment (hereinafter
“Environmental Laws”), which violation would have a material adverse effect on
the


 


27

















 


business, assets or
financial condition of the Borrower and its Subsidiaries taken as a whole;


 


(b)                                 neither
the Borrower nor any of its Subsidiaries has received written notice from any
third party including, without limitation: any federal, state or local
governmental authority, (i) that it has been identified by the United States
Environmental Protection Agency (“EPA”) or any other federal, state or local
governmental agency as a potentially responsible party under CERCLA or any
other Environmental Law with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B or with respect to Hazardous
Substances which any one of them has generated, transported or disposed of at
any site; or (ii) that it is subject to any material outstanding claim, action,
cause of action, complaint, or legal or administrative proceeding (in each
case, contingent or otherwise) arising out of any third party’s incurrence of
costs, expenses, losses or damages of any kind whatsoever in connection with
the release of Hazardous Substances;


 


(c)                                  (i)                                     no
portion of any Real Estate has been used by the Borrower or any of its
Subsidiaries for the handling, storage or disposal of Hazardous Substances
except in material compliance with applicable Environmental Laws; there are no
underground tank or other underground storage receptacle for Hazardous
Substances located on any portion of such Real Estate; (ii) in the course of any
activities conducted by the Borrower, its Subsidiaries or, to the best
knowledge of the Borrower, operators of any of their properties, no Hazardous
Substances have been generated or are being used on the Real Estate except in
material compliance with applicable Environmental Laws; (iii) there have been
no “releases” (as defined by CERCLA or applicable state law) of Hazardous
Substances on, upon, into or from the properties of the Borrower or its
Subsidiaries, which releases would have a material adverse effect on the value
of any of such Real Estate; and (iv) in addition, any Hazardous Substances that
have been generated by the Borrower or any of its Subsidiaries on any of such
Real Estate have been or will be promptly transported offsite in material compliance
with  Environmental Laws; and


 


(d)                                 None
of the Real Estate is subject to any environmental transfer act law requiring
the performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the transactions
set forth herein and contemplated hereby, or as a condition to the recording of
any Mortgage or to the effectiveness of any other transactions contemplated
hereby.


 


7. 18.                  Subsidiaries, etc.  The Borrower has no
Subsidiaries other than WNG Holdings (International) LTD, Inc., a Nevada
corporation (“WNG Holdings”).  Except as
set forth on Schedule 7.18 hereto, neither the Borrower nor any of
its Subsidiaries owns, directly or indirectly, any equity in any corporation.


 


7. 19.                  Bank Accounts.  Schedule 7.19 hereto identifies
each financial institution with which the Borrower holds or maintains a
depository, disbursement or investment account (other than any accounts held or
maintained with the Agent), the address of such institutions, the account
number and the purpose for which such account is used.


 


7. 20.                  Disclosure.  The
representations and warranties made by the Borrower in this Credit Agreement or
in any agreement, instrument, document, certificate, statement or letter
furnished to the Banks on behalf of the Borrower in connection with the
transactions contemplated by the Loan Documents do not, taken as a whole,
together with all other


 


28

















 


information publicly
available or provided by the Borrower in connection with the transactions
contemplated by the Loan Documents, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading.


 


8.                                      AFFIRMATIVE COVENANTS OF THE
BORROWER.


 


The Borrower covenants
and agrees that, so long as any Revolving Credit Loan, Unpaid Reimbursement
Obligation, Letter of Credit or Note is outstanding or any Bank has any
obligation to make any Revolving Credit Loans or the Agent has any obligation
to issue, extend or renew any Letters of Credit:


 


8. 1.                         Punctual Payment.  The Borrower will duly and punctually
pay or cause to be paid the principal and interest on the Revolving Credit
Loans, all Reimbursement Obligations, the Letter of Credit Fees, the closing,
unused credit and syndication fees, if any, the Agent’s administrative fee and
all other amounts provided for in this Credit Agreement and the other Loan
Documents to which the Borrower is a party, all in accordance with the terms of
this Credit Agreement and such other Loan Documents.


 


8. 2.                         Maintenance of Office.  Borrower will maintain
its principal executive office at 2002 South 5070 West, Salt Lake City,
Utah  84104-4726, or at such other place
in the United States of America as the Borrower shall designate upon written
notice to the Agent, where notices, presentations and demands to or upon the
Borrower in respect of the Loan Documents to which the Borrower is a party may
be given or made.


 


8. 3.                         Records and Accounts.  The Borrower will
(a) keep, and cause each of its Subsidiaries to keep, true and accurate records
and books of account in which full, true and correct entries will be made in
accordance with GAAP and (b) maintain adequate accounts and reserves for all
taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves.


 


8. 4.                         Financial Statements,
Certificates and Information.  The Borrower will
deliver to the Agent:


 


(a)                                  as
soon as practicable, but in any event not later than ninety (90) days after the
end of each fiscal year of the Guarantor, commencing with the fiscal year
ending May 31, 2004, the audited consolidated balance sheet of the
Guarantor and the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries, each as at the end of such fiscal year, and the related
consolidated statements of income and cash flow for such fiscal year, each
setting forth in comparative form the figures for the previous fiscal year and
all such consolidated statements to be in reasonable detail, prepared in
accordance with GAAP, and with respect to such audited consolidated balance
sheet and financial statements of the Guarantor, certified without
qualification by independent certified public accountants reasonably
satisfactory to the Agent;


 


(b)                                 as
soon as practicable, but in any event not later than forty-five (45) days after
the end of each of the first three (3) fiscal quarters in each fiscal year of
the Borrower, commencing with the fiscal quarter ending August 31, 2004,
copies of the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries, each as at the end of such quarter, and the related consolidated
statements of income and cash flow for the portion of the Borrower’s fiscal
year then elapsed, all in reasonable detail and prepared in accordance with
GAAP, together with a certification by the Chief Financial Officer of the
Borrower that the information contained in such financial statements fairly


 


29

















 


presents in accordance
with GAAP the financial position of the Borrower and its Subsidiaries on the
date thereof (subject to year-end adjustments);


 


(c)                                  (i)
simultaneously with the delivery of the financial statements referred to in
subsection (b) above, and (ii) as soon as practicable, but in any event
not later than ninety (90) days after the end of each fiscal year of the
Borrower, a statement certified by the Chief Financial Officer of the Borrower
in substantially the form of Exhibit C hereto and setting
forth in reasonable detail computations evidencing compliance with the
covenants contained in §10 and (if applicable) reconciliations to reflect
changes in GAAP since April 30, 2004;


 


(d)                                 at
any time the Borrowing Base is in effect, as soon as practicable, but in any
event not later than fifteen (15) days after the end of each month, a statement
certified by the Chief Financial Officer of the Borrower in substantially the
form of Exhibit D hereto and setting forth in reasonable
detail computations evidencing compliance with the covenants contained in
§2.11; and


 


(e)                                  from
time to time such other financial data and information regarding the financial
and other affairs of the Borrower and its Subsidiaries (including accountants’
management letters) as the Agent or any Bank may reasonably request.


 


8. 5.                         Notices.


 


8. 5. 1.                                    Defaults.  The
Borrower will promptly notify the Agent in writing of the occurrence of any
Default or Event of Default.  If any
Person shall give any written notice or take any other action in respect of a
claimed default (whether or not constituting an Event of Default) under this
Credit Agreement, or any other note, evidence of indebtedness, indenture or
other obligation in an amount equal to or greater than $500,000, to which or
with respect to which the Borrower or any of its Subsidiaries is a party or
obligor, whether as principal, guarantor, surety or otherwise, the Borrower
shall forthwith give written notice thereof to the Agent, describing the notice
or action and the nature of the claimed default.


 


8. 5. 2.                                    Environmental
Events.  The Borrower will promptly give notice to the Agent
of and in any event within fifteen (15) days after receipt of any written
notice of, any violation of any Environmental Law that the Borrower or any of
its Subsidiaries reports in writing or is reportable by such Person in writing
(or for which any written report supplemental to any oral report is made) to
any federal, state or local environmental agency and which would reasonably be
expected to have a Material Adverse Effect.


 


8. 5. 3.                                    Notification
of Claim against Collateral.  The Borrower will, promptly
upon becoming aware thereof, notify the Agent in writing of any setoff, claims,
withholdings or other defenses to which any of the Collateral, or the Agent’s
rights with respect to the Collateral, is subject.


 


8. 5. 4.                                    Notice
of Litigation and Judgments.  The Borrower will give notice
to the Agent in writing within fifteen (15) Business Days of becoming aware of
any litigation or proceedings threatened in writing and delivered to the
Borrower or any of its Subsidiaries or any pending litigation and proceedings
affecting the Borrower or any of its Subsidiaries or to which the Borrower or
any of its Subsidiaries is or becomes a party (including without limitation any
shareholder derivative suit) involving an uninsured claim against the Borrower
or any of its Subsidiaries that would reasonably be expected to have a Material
Adverse Effect and stating the nature and status of such litigation or
proceedings.  The Borrower will give
notice to the Agent in writing, in form and detail reasonably satisfactory to
the Agent,


 


30

















 


within ten (10) Business
Days of any judgment not covered by insurance, final or otherwise, against the
Borrower or any of its Subsidiaries in an amount in excess of $500,000.


 


8. 6.                         Corporate Existence; Maintenance
of Properties.  The Borrower will do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence, rights and franchises and those of its Subsidiaries.  The Borrower (a) will maintain, repair and
replace, its properties to the extent necessary to prevent the occurrence of a
Material Adverse Effect and (b) will, and will cause each of its Subsidiaries
to, continue to engage primarily in the businesses now conducted by them and in
related businesses; provided that nothing in this §8.6 shall prevent (i)
the Borrower from discontinuing the operation and maintenance of any of its
properties or any of those of its Subsidiaries if such discontinuance is, in
the judgment of the Borrower, desirable in the conduct of its business or the
business of its Subsidiaries and would not in the aggregate be reasonably
expected to have a Material Adverse Effect or (ii) the mergers and acquisitions
permitted by §9.5.1 hereof.


 


8. 7.                         Insurance.  The
Borrower will, and will cause each of its Subsidiaries to, maintain with
financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall be
in accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms,
in such forms and for such periods as may be reasonable and prudent and, in any
event, consistent in all material respects with the coverages set forth on Schedule 8.7
hereto.


 


8. 8.                         Taxes.  The
Borrower will, and will cause each of its Subsidiaries to, duly pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all taxes, assessments and other governmental charges imposed upon it
or them and its or their real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom; provided that any such
tax, assessment, charge, levy or claim need not be paid if the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings, if the Borrower or such Subsidiary shall have set aside on its
books adequate reserves in accordance with GAAP; and provided  further
that the Borrower and each Subsidiary of the Borrower will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor.


 


8. 9.                         Inspection of Properties and
Books, etc.


 


8. 9. 1.                                    General.  As
long as any Revolving Credit Loans are outstanding, the Borrower shall permit
the Banks, through the Agent or any of the Banks’ other designated
representatives, to visit and inspect any of the properties of the Borrower or
any of its Subsidiaries, to examine the books of account of the Borrower and
its Subsidiaries (and to make copies thereof and extracts therefrom), and to
discuss the affairs, finances and accounts of the Borrower and its Subsidiaries
with, and to be advised as to the same by, its and their officers, all at such
reasonable times and intervals as the Agent or any Bank may reasonably request.


 


8. 9. 2.                                    Commercial Finance Examinations.  After
the occurrence of a Collateral Event, the Borrower will permit the Agent’s
commercial finance examiners from time to time at any reasonable time to visit
the Borrower’s premises and conduct reviews and audits of the Borrower’s books
and records.  The Borrower agrees to pay
the fees and expenses of the Agent relating to one such commercial finance
examination which shall be requested by the Agent to be paid the Borrower, and
in addition, all costs and expenses of any such commercial finance examinations
which are commenced after the occurrence and during the continuance of an Event
of Default (it being understood that such commercial finance examination need
not be completed prior to the date on which such Event of Default has been
cured or waived).  The Banks shall bear
the costs of all commercial finance examinations not expressly assumed by the


 


31

















 


Borrower in the preceding
sentence, on a pro-rata basis in accordance with their respective
Commitment Percentages.


 


8. 9. 3.                                    Environmental
Assessments.  Upon and after the occurrence of a Collateral
Event, the Borrower will and shall cause the Guarantor to provide to the Agent
copies of all environmental assessments of the Real Estate or audits obtained
by either of them from time to time.


 


8. 9. 4.                                    Communications
with Accountants.  The Borrower authorizes the Agent and, if
accompanied by the Agent, the Banks to communicate directly with the Borrower’s
independent certified public accountants and authorize such accountants to
disclose to the Agent and the Banks any and all financial statements and other
supporting financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other affairs of
the Guarantor or the Borrower or any of its Subsidiaries.  At the request of the Agent, the Borrower
shall deliver a letter addressed to such accountants instructing them to comply
with the provisions of this §8.9.4


 


8. 10.                  Compliance with Laws, Contracts,
Licenses, and Permits.  The Borrower will, and
will cause each of its Subsidiaries to, comply in all material respects with
(a) the applicable laws and regulations wherever its business is conducted,
including all Environmental Laws, (b) the provisions of its organizational
documents and bylaws, (c) all agreements and instruments by which it or any of
its properties may be bound and (d) all applicable decrees, orders, and
judgments, except in the case of clauses (a), (c) and (d) of this §8.10 where
the failure to do so would not have a Material Adverse Effect.  If any authorization, consent, approval,
permit or license from any officer, agency or instrumentality of any government
shall become necessary or required in order for the Borrower or any of its
Subsidiaries (i) to fulfill any of its obligations hereunder or any of the
other Loan Documents to which the Borrower is a party or (ii) to conduct the
business in which it is now engaged where the failure to obtain such
authorization, consent, approval, permit or license would have a Material
Adverse Effect, the Borrower will, or (as the case may be) will cause such
Subsidiary to, take or cause to be taken without delay all reasonable steps
within the power of the Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.


 


8. 11.                  Employee Benefit Plans.  The Borrower
will promptly upon receipt, furnish to the Agent any notice, report or demand
received in respect of a Guaranteed Pension Plan under §§302, 4041, 4042, 4043,
4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan,
under §§4041A, 4202, 4219, 4242 or 4245 of ERISA.


 


8. 12.                  Use of Proceeds.  The Borrower will use the proceeds of the
Revolving Credit Loans solely (i) to refinance existing Indebtedness under that
certain Credit Agreement dated as of June 30, 2000, as subsequently
amended, by and between the Borrower, the financial institutions party thereto,
and Deutsche Bank, successor in interest to Bankers Trust Company, as agent,
(ii) for Permitted Acquisitions, (iii) for working capital, and (iv) for
general corporate purposes.  The
Borrower will obtain Letters of Credit solely for general corporate purposes,
and no portion of any Revolving Credit Loan shall be used, and no portion of
any Letter of Credit shall be obtained, for the purpose of purchasing or
carrying any “margin security” or “margin stock” as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224, except in full and continuing compliance with said
Regulations U and X.


 


8. 13.                  Additional Collateral.  If, after a
Collateral Event shall have occurred, the Guarantor or the Borrower acquires
any real property which has a fair market value in excess of $250,000 or leases
real estate which has a fair market value in excess of $250,000 for a term in
excess of five (5) years, the Borrower shall, or shall cause the Guarantor to,
forthwith deliver to


 


32

















 


the Agent a fully
executed mortgage or deed of trust (including a leasehold deed of trust) over
such real estate, in form and substance satisfactory to the Agent, together
with title insurance policies, surveys (to the extent requested by the Agent),
evidences of insurance with the Agent named as loss payee and additional
insured, legal opinions and other documents and certificates with respect to
such real estate as was required for Real Estate of the Guarantor or the
Borrower upon the occurrence of the Collateral Event.  The Borrower further agrees that, following the taking of such
actions with respect to such assets, the Agent shall have for the benefit of
the Banks and the Agent a valid and enforceable first priority lien on such
assets, free and clear of all defects and encumbrances except for Permitted
Liens.


 


8. 14.                  Further Assurances.  The Borrower will,
and will cause each of its Subsidiaries to, cooperate with the Banks and the
Agent and execute such further instruments and documents as the Banks or the Agent
shall reasonably request to carry out to their reasonable satisfaction the
transactions contemplated by this Credit Agreement and the other Loan
Documents.


 


9.                                      CERTAIN NEGATIVE COVENANTS OF
THE BORROWER.


 


The Borrower covenants
and agrees that, so long as any Revolving Credit Loan, Unpaid Reimbursement
Obligation, Letter of Credit or Note is outstanding or any Bank has any
obligation to make any Revolving Credit Loans or the Agent has any obligations
to issue, extend or renew any Letters of Credit:


 


9. 1.                         Restrictions on Indebtedness.  The
Borrower will not, and will not permit any of its Subsidiaries to, create,
incur, assume, guarantee or be or remain liable, contingently or otherwise,
with respect to any Indebtedness other than:


 


(a)                                  Indebtedness
to the Banks and the Agent arising under any of the Loan Documents;


 


(b)                                 current
Indebtedness of the Borrower or its Subsidiaries incurred in the ordinary
course of business not incurred through (i) the borrowing of money, or (ii) the
obtaining of credit except for credit on an open account basis customarily
extended and in fact extended in connection with normal purchases of goods and
services;


 


(c)                                  Indebtedness
in respect of taxes, assessments, governmental charges or levies and claims for
labor, materials and supplies to the extent that payment therefor shall not at
the time be required to be made in accordance with the provisions of §8.8
hereof;


 


(d)                                 Indebtedness
in respect of judgments or awards that have been in force for less than the
applicable period for taking an appeal so long as execution is not levied
thereunder or in respect of which the Borrower or its Subsidiaries shall at the
time in good faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained pending such
appeal or review;


 


(e)                                  endorsements
for collection, deposit or negotiation and warranties of products or services,
in each case incurred in the ordinary course of business;


 


(f)                                    Indebtedness
incurred in connection with the acquisition after the date hereof of any real
or personal property by the Borrower or such Subsidiary, provided that
the aggregate principal amount of such Indebtedness of the Borrower and its
Subsidiaries shall not exceed the aggregate amount of $1,000,000 at any one
time without the written consent of the Agent;


 


33

















 


(g)                                 Indebtedness
existing on the date hereof and listed and described on Schedule 9.1
hereto and any refinancing thereof;


 


(h)                                 Indebtedness
consisting of regularly scheduled rental payments under Capital Leases,
provided, that the aggregate face amount of all Indebtedness of the Borrower
and its Subsidiaries combined in respect of Capital Leases shall not exceed
$2,000,000 at any time after the first date upon which the Total Leverage Ratio
equals or exceeds 1.0:1.0; and


 


(i)                                     unsecured
Indebtedness (in addition to the Indebtedness permitted pursuant to the
foregoing clauses (a) through (h)) in an aggregate outstanding principal amount
not to exceed at any time in the aggregate for the Borrower and its
Subsidiaries combined, (i) $5,000,000 at any time prior to the first date upon
which the Total Leverage Ratio is less than 1.0:1.0, and (ii) $2,000,000 after
the first date upon which the Total Leverage Ratio equals or exceeds 1.0:1.0.


 


9. 2.                         Restrictions on Liens.  Except for liens
that shall not exceed $10,000,000 in the aggregate, from and after the first
date upon which the Total Leverage Ratio equals or exceeds 0.5:1.0, the
Borrower will not, and will not permit any of its Subsidiaries to, create or
incur or suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, charge, restriction or other security interest of any kind
upon any of its property or assets of any character whether now owned or
hereafter acquired, or upon the income or profits therefrom or enter into, or
permit to remain in effect, any agreement by which such Person agrees not to
encumber, mortgage, pledge, restrict or grant a security interest in any of its
assets; provided that the Borrower and any Subsidiary of the Borrower
may create or incur or suffer to be created or incurred or to exist:


 


(a)                                  liens
in favor of the Borrower on all or part of the assets of its Subsidiaries
securing Indebtedness owing by its Subsidiaries to the Borrower;


 


(b)                                 liens
to secure taxes, assessments and other government charges in respect of
obligations not overdue or contested in good faith, or liens on properties to
secure claims for labor, material or supplies in respect of obligations not
overdue or contested in good faith, or to the extent that the payment therefor
shall not at the time be required to be made in accordance with the provisions
of §8.8 hereof;


 


(c)                                  deposits
or pledges made in connection with, or to secure payment of, workmen’s
compensation, unemployment insurance, old age pensions or other social security
obligations;


 


(d)                                 liens
on properties in respect of judgments or awards, the Indebtedness with respect
to which is permitted by §9.1(d), and those adequately covered by insurance;


 


(e)                                  liens
of carriers, warehousemen, mechanics and materialmen, and other like liens on
properties, in existence less than one hundred twenty (120) days from the date
of creation thereof in respect of obligations not overdue or contested in good
faith;


 


(f)                                    encumbrances
on Real Estate consisting of easements, rights of way, zoning restrictions,
restrictions on the use of real property and minor defects and irregularities
in the title thereto, landlord’s or lessor’s liens under leases to which the
Borrower or a Subsidiary of the Borrower is a party, and other minor liens or
encumbrances none of which in the reasonable opinion of the Borrower interferes
materially with the use of the property affected in the ordinary conduct of the
business of


 


34

















 


the Borrower and its
Subsidiaries or the marketability of such property, which defects do not
individually or in the aggregate have a Material Adverse Effect;


 


(g)                                 liens
existing on the date hereof and listed on Schedule 9.2 hereto;


 


(h)                                 purchase
money security interests in or purchase money mortgages on real or personal
property or improvements acquired or constructed after the date hereof to
secure purchase money Indebtedness of the type and amount permitted by §9.1(f),
incurred in connection with the acquisition of such property, which security
interests or mortgages cover only the real or personal property so acquired;


 


(i)                                     deposits
to secure bids, tenders, contracts, leases, statutory obligations and appeal
bonds, performance bonds and other obligations of like nature incurred in the
ordinary course of business;


 


(j)                                     liens
that are contractual or statutory rights of setoff relating to depository
accounts;


 


(k)                                  liens
upon any equipment of the Borrower or any Subsidiary subject to a capital
lease, to the extent such capital lease is permitted by Section 9.1 and
provided, that such liens (i) secure only the payment of Indebtedness arising
under such capital lease and (ii) extend only to such equipment, the contracts
related thereto and the proceeds thereof;


 


(l)                                     extensions
and renewals of the foregoing permitted liens; provided, that the aggregate
amount of such extended or renewed liens is not increased and such extended or
renewed liens are on terms and conditions no more restrictive than the terms
and conditions of the liens being extended or renewed;


 


(m)                               liens
in favor of the Agent for the ratable benefit of the Banks; and


 


(n)                                 such
other liens as the Agent may approve in writing, such approval not to be
unreasonably withheld;


 


9. 3.                         Restrictions on Investments.  From and
after the first date upon which the Total Leverage Ratio equals 1.0:1.0, the
Borrower will not, and will not permit any of its Subsidiaries to, make any
Investment except Investments in:


 


(a)                                  marketable
direct or guaranteed obligations of the United States of America that mature
within one (1) year from the date of purchase by the Borrower;


 


(b)                                 demand
deposits, certificates of deposit, bankers acceptances and time deposits of United
States banks having total assets in excess of $1,000,000,000;


 


(c)                                  securities
commonly known as “commercial paper” issued by (i) any of the Banks or (ii) a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated and
the ratings for which are not less than “P 1” if rated by Moody’s
Investors Services, Inc., and not less than “A 1” if rated by
Standard & Poor’s Corporation;


 


(d)                                 Investments
existing on the date hereof and listed on Schedule 9.3 hereto and
Investments consisting of the accrual of interest on the Investments listed on Schedule 9.3
hereto;


 


35

















 


(e)                                  Permitted
Acquisitions;


 


(f)                                    loans
and advances to employees of the Borrower made in the ordinary course of
business not to exceed $100,000 in any individual case and $500,000 in the
aggregate;


 


(g)                                 guarantees
permitted under Section 9.1; and


 


(h)                                 such
other Investments as the Agent may approve in writing, which approval shall not
be unreasonably withheld.


 


9. 4.                         Distributions.  From and after the first date upon which
the Total Leverage Ratio equals 1.0:1.0, the Borrower and its Subsidiaries will
not make any Distributions other than (a)  Distributions from any
Subsidiary of the Borrower to the Borrower, (b) Distributions from Borrower to
Guarantor to permit Guarantor to pay federal, state and local income tax
obligations actually due and payable in cash by Guarantor and (c) Distributions
from Borrower to Guarantor to pay fees and expenses necessary to maintain
Guarantor’s corporate existence and good standing.


 


9. 5.                         Merger, Consolidation and
Disposition of Assets.


 


9. 5. 1.                                    Mergers
and Acquisitions.  From and after the first date upon which
the Total Leverage Ratio equals or exceeds 1.0:1.0, the Borrower will not, and
will not permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock acquisition
(other than the acquisition of assets in the ordinary course of business
consistent with past practices) except (a) the merger or consolidation of one
or more of the Subsidiaries of the Borrower with and into the Borrower, (b) the
merger or consolidation of two or more Subsidiaries of the Borrower, and (c)
the acquisition by the Borrower (whether of stock or substantially all of the
assets of a business or business division as a going concern or by means of a
merger or consolidation) of a greater than 50% interest in any other Person, or
less than 50% in any Person provided that the amount of Borrower’s investment
in all such Persons does not exceed $5,000,000 in the aggregate, (a “Permitted
Acquisition”), provided that (i) such other Person shall operate a
business related to that of the Borrower, (ii) no Default or Event of Default
shall have occurred and be continuing and none shall exist after giving effect
to such Permitted Acquisition, (iii) no Permitted Acquisition shall constitute
a so-called hostile acquisition or takeover of such other Person, and (iv) if
the Borrower or its Subsidiary shall merge with such other Person, such
Borrower or Subsidiary shall be the surviving party of such merger or shall
hold a greater than 50% interest in the surviving party.  Borrower shall obtain the Agent’s written
consent for any other merger or acquisition, which consent shall not be
unreasonably withheld.


 


9. 5. 2.                                    Disposition
of Assets.  Except for dispositions that shall not exceed
$15,000,000 in the aggregate, from and after the first date upon which the
Total Leverage Ratio equals or exceeds 1.0:1.0, the Borrower will not, and will
not permit any of its Subsidiaries to, become a party to or agree to or effect
any disposition of assets, other than the (a) disposition of assets in the
ordinary course of business, consistent with past practices, (b) dispositions
of margin stock (as defined by Regulation U of the Board of Governors of the
Federal Reserve System) for fair market value in cash, (c) sale-leasebacks
permitted by §9.6, and (d) such other dispositions as the Majority Banks may
approve.


 


9. 6.                         Sale and Leaseback.  The Borrower will
not, and will not permit any of its Subsidiaries to, enter into any
arrangement, directly or indirectly, whereby the Borrower or any Subsidiary of
the Borrower shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that the Borrower or
any Subsidiary of


 


36

















 


the Borrower intends to
use for substantially the same purpose as the property being sold or
transferred without the written consent of the Agent, unless any Indebtedness
arising therefrom is permitted by §9.1 and the proceeds thereof do not exceed
$5,000,000 in the aggregate.


 


9. 7.                         Compliance with Environmental Laws.  The
Borrower will not, and will not permit any of its Subsidiaries to, (a) use any
of the Real Estate or any portion thereof for the handling, processing, storage
or disposal of Hazardous Substances, (b) cause or permit to be located on any
of the Real Estate any underground tank or other underground storage receptacle
for Hazardous Substances, (c) generate any Hazardous Substances on any of the
Real Estate, (d) conduct any activity at any Real Estate or use any Real
Estate, in the case of any of clauses (a), (b), (c) or (d) of this §9.7, in any
manner so as to cause a “release” (as defined in CERCLA or applicable state
law), or a violation of Environmental Law, which would reasonably be expected
to have a Material Adverse Effect or materially impair the value of the
Collateral.


 


9. 8.                         Employee Benefit Plans.  None of the
Guarantor, the Borrower or any of its Subsidiaries will:


 


(a)                                  engage
in any “prohibited transaction” within the meaning of §406 of ERISA or §4975 of
the Code which could result in a material liability for the Borrower or any of
its Subsidiaries; or


 


(b)                                 permit
any Guaranteed Pension Plan to incur an “accumulated funding deficiency”, as
such term is defined in §302 of ERISA, whether or not such deficiency is or may
be waived; or


 


(c)                                  fail
to contribute to any Guaranteed Pension Plan to an extent which, or terminate
any Guaranteed Pension Plan in a manner which, could result in the imposition
of a lien or encumbrance on the assets of the Guarantor, the Borrower or any of
its Subsidiaries pursuant to §302(f) or §4068 of ERISA; or


 


(d)                                 permit
or take any action which would result in the aggregate benefit liabilities
(with the meaning of §4001 of ERISA) of all Guaranteed Pension Plans exceeding
the value of the aggregate assets of such Plans, disregarding for this purpose
the benefit liabilities and assets of any such Plan with assets in excess of
benefit liabilities.


 


9. 9.                         Bank Accounts.  The Borrower will not, nor will it permit
its Subsidiaries to, establish after the date hereof any depository,
disbursement accounts other than those with the Agent without the prior written
consent of the Agent, which consent shall not be unreasonably withheld.


 


10.                               FINANCIAL COVENANTS OF THE BORROWER.


 


The Borrower covenants
and agrees that, so long as any Revolving Credit Loan, Unpaid Reimbursement
Obligation, Letter of Credit or Note is outstanding or any Bank has any
obligation to make any Revolving Credit Loans or the Agent has any obligation
to issue, extend or renew any Letters of Credit:


 


10. 1.                  Maximum
Senior Leverage Ratio.  The Borrower will not permit the
ratio of Senior Debt divided by Consolidated EBITDA for any period of four (4)
consecutive fiscal quarters to exceed 2.75:1.00 (the “Senior Leverage Ratio”).  For purposes of this §10, “Senior Debt”
means all of the Borrower’s and its Subsidiaries indebtedness for borrowed
money, plus Capital Leases, minus Subordinated Debt;
“Subordinated Debt” means indebtedness for


 


37

















 


borrowed money and
Capital Leases which have been subordinated by written agreement to the
Indebtedness owed by Borrower to the Banks hereunder in form and substance
reasonably acceptable to the Agent; and “Consolidated EBITDA” means the net
income of the Borrower and its Subsidiaries on a consolidated basis (excluding
extraordinary gains, extraordinary losses and any income or loss from
discontinued operations), plus the aggregate amounts deducted in
determining such net income in respect of interest expense, taxes, depreciation
and amortization, and any other non-cash charges.


 


10. 2.                  Maximum Total
Leverage Ratio.  The Borrower will not permit the ratio of
Total Debt divided by Consolidated EBITDA for any period of four (4)
consecutive fiscal quarters to exceed 3.00:1.00 (the “Total Leverage Ratio”).  For purposes of this §10, “Total Debt” means
all of the Borrower’s and its Subsidiaries indebtedness for borrowed money and
Capital Leases, including Subordinated Debt.


 


10. 3.                  Maximum Fixed
Charge Coverage Ratio.  The Borrower will not permit the
ratio of Consolidated EBITDA plus operating lease expense to Fixed Charges for
any period of four (4) consecutive fiscal quarters to be less than
1.50:1.00.  For purposes of this §10,
“Fixed Charges” includes cash interest expense, plus operating lease
expense, plus principal payments on amortizing long-term debt and
Capital Leases.  For purposes of this
Credit Agreement, “Capital Leases” means leases under which the Borrower or any
of its Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on the balance
sheet of the lessee or obligor in accordance with GAAP.


 


10. 4.                  Maximum
Capital Expenditures.  From and after the first date upon
which the Total Leverage Ratio equals or exceeds 1.0:1.0, the Borrower will not
make, or permit any Subsidiary of the Borrower to make, Capital Expenditures in
any period of four (4) consecutive fiscal quarters in excess of the aggregate
amount of $2,000,000 without the prior written approval of the Agent, which
approval will not be unreasonably withheld. 
For purposes of this Credit Agreement, “Capital Expenditures” means
amounts paid or indebtedness incurred by the Borrower or any of its Subsidiaries
in connection with the purchase or lease by the Borrower or any of its
Subsidiaries of fixed assets (such as land, buildings, fixtures, machinery and
equipment) that would be required to be capitalized and shown on the balance
sheet of the Borrower in accordance with GAAP (excluding for purposes of this
definition, all capitalized interest expense associated therewith), other than
any item customarily charged directly to expense or depreciated over a useful
life of twelve (12) months or less in accordance with GAAP.


 


11.                               CLOSING CONDITIONS.


 


The effectiveness of this
Agreement and the obligations of the Banks to make Revolving Credit Loans and
to issue Letters of Credit hereunder shall be subject to the satisfaction of
the following conditions precedent:


 


11. 1.                  Loan
Documents.  Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of the
Banks.  Each Bank shall have received a
fully executed copy of each such document other than the Notes payable to
another Bank.


 


11. 2.                  Certified
Copies of Organizational Documents.  Each of the Banks shall
have received from the Guarantor, the Borrower, and each of the Borrower’s
Subsidiaries (a) a copy, certified by a duly authorized officer of such Person
to be true and complete on the Closing Date, of each of (i) its charter or
other incorporation documents as in effect on such date of certification, and
(ii) its by-laws as in effect on such date and (b) certificates of good
standing or


 


38

















 


authorization to do
business from the Secretary of State of its state of incorporation and each
state in which such Person does business.


 


11. 3.                  Corporate
Action.  All corporate and each shareholder action necessary
for the valid execution, delivery and performance by the Borrower of this
Credit Agreement and by the Guarantor of the Loan Documents to which it is or
is to become a party shall have been duly and effectively taken, and evidence
thereof satisfactory to the Agent shall have been provided to the Agent.


 


11. 4.                  Incumbency
Certificate.  The Agent shall have received from the
Guarantor and the Borrower an incumbency certificate, dated as of the Closing
Date, signed by a duly authorized officer of the Guarantor or the Borrower, as
the case may be, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
the Guarantor and the Borrower, each of the Loan Documents to which the
Guarantor or the Borrower is or is to become a party; (b) in the case of the
Borrower, to make Revolving Credit Loan Requests and Conversion Requests and to
apply for Letters of Credit; and (c) to give notices and to take other action
on its behalf under the Loan Documents.


 


11. 5.                  Validity of
Liens.  The Security Documents shall be effective to create
in favor of the Agent a legal, valid and enforceable first security interest in
and lien upon the Collateral.  All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the reasonable opinion of the Agent to protect and preserve such
security interests shall have been duly effected, including without limitation,
the delivery of stock powers executed in blank with respect to any capital
stock pledged to the Agent pursuant to the Stock Pledge Agreements.  The Agent shall have received evidence
thereof in form and substance satisfactory to the Agent.


 


11. 6.                  Certificates
of Insurance.  The Agent shall have received a certificate of
insurance from the Borrower’s insurer(s) or its independent insurance broker
dated within thirty (30) days of the Effective Date, identifying insurers,
types of insurance and insurance limits as set forth in Schedule 8.7.


 


11. 7.                  Financial
Condition.  The Agent shall have received the financial
statements referred to in §7.4 hereof and such supplementary documentation with
respect thereto as the Agent may reasonably request, and all such information
shall be in form and substance satisfactory to the Agent.  There shall have occurred no Material
Adverse Change since, with respect to the Guarantor, the Balance Sheet Date
and, with respect to the Borrower and its Subsidiaries, April 30, 2004.


 


11. 8.                  Solvency
Certificate.  The
Agent hall have received an officer’s certificate of the Borrower dated
as of the Closing Date as to the solvency of the Borrower and its Subsidiaries,
individually and collectively, both before and after the consummation of the
transactions contemplated by the Loan Documents.


 


11. 9.                  Opinion of
Counsel.  The
Agent shall have received a favorable legal opinion addressed to the Banks and
the Agent, dated as of the Closing Date, in form and substance satisfactory to
the Banks and the Agent, from Stoel Rives LLP, counsel to the Guarantor, the
Borrower and its Subsidiaries.


 


11. 10.           Payment of Fees.  The
Borrower shall have paid to the Agent the closing and administrative fees
described in §2.2 hereof.


 


39

















 


12.                               CONDITIONS TO ALL BORROWINGS.


 


The obligations of the
Banks to make any Revolving Credit Loan, and of the Agent to issue, extend or
renew any Letter of Credit, in each case whether on or after the Closing Date,
shall also be subject to the satisfaction of the following conditions
precedent:


 


12. 1.                  Representations
True; No Event of Default.  Each of the representations and
warranties of the Borrower contained in this Credit Agreement, the other Loan
Documents, or in any document or instrument delivered pursuant to or in
connection with this Credit Agreement shall be true as of the date as of which
they were made and shall also be true at and as of the time of the making or
assumption of such Revolving Credit Loan or the issuance, extension or renewal
of such Letter of Credit, with the same effect as if made at and as of that
time (except to the extent of changes resulting from transactions contemplated
or permitted by this Credit Agreement and the other Loan Documents and changes
occurring in the ordinary course of business that singly or in the aggregate
are not reasonably expected to have a Material Adverse Effect, and to the
extent that such representations and warranties relate expressly to an earlier
date) and no Default or Event of Default shall have occurred and be continuing.


 


12. 2.                  No Legal
Impediment.  No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make such Revolving
Credit Loan or to participate in the issuance, extension or renewal of such
Letter of Credit or in the reasonable opinion of the Agent would make it
illegal for the Agent to issue, extend or renew such Letter of Credit.


 


13.                               EVENTS OF DEFAULT; ACCELERATION; ETC.


 


13. 1.                  Events of
Default and Acceleration.  If any of the following events
(“Events of Default” or, if the giving of notice or the lapse of time or both
is required, then, prior to such notice or lapse of time, “Defaults”) shall
occur:


 


(a)                                  the
Borrower shall fail to pay any principal of the Revolving Credit Loans or any
Reimbursement Obligation when the same shall become due and payable, whether at
the stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;


 


(b)                                 the
Borrower shall fail to pay any interest on the Revolving Credit Loans, the
unused credit fees, syndication fees, any Letter of Credit Fee, the Agent’s
administrative fee, or other sums due hereunder or under any of the other Loan
Documents, when the same shall become due and payable, whether at the stated
date of maturity or any accelerated date of maturity or at any other date fixed
for payment and such failure shall continue for a period of fifteen (15) days;


 


(c)                                  the
Borrower shall fail to comply with any of its covenants contained in §§8.5
through 8.13, 9 or 10 and Borrower shall fail to cure the same within fifteen
(15) days;


 


(d)                                 the
Borrower shall fail to perform any term, covenant or agreement contained herein
or in any of the other Loan Documents (other than those specified elsewhere in
this §13.1) for fifteen (15) Business Days after the earlier of (i) written
notice of such failure has been given to the Borrower by the Agent or (ii) the
date on which the Borrower shall become aware thereof;


 


(e)                                  any
representation or warranty of the Borrower in this Credit Agreement or any of
the other Loan Documents or in any other document or instrument delivered


 


40

















 


pursuant to or in
connection with this Credit Agreement shall prove to have been false in any
material respect upon the date when made or deemed to have been made or
repeated;


 


(f)                                    there
shall occur a default or event of default (in each case which shall continue
beyond the expiration of any applicable grace periods) which permits the
acceleration of the maturity of any obligation for borrowed money or credit
received or in respect of any Capital Leases of the Borrower, and the aggregate
amount of all such obligations, credit and Capital Leases with respect to which
a default or an event of default has occurred exceeds $1,000,000.


 


(g)                                 the
Borrower shall make an assignment for the benefit of creditors, or admit in
writing its inability to pay or generally fail to pay its debts as they mature
or become due, or shall petition or apply for the appointment of a trustee or
other custodian, liquidator or receiver of the Borrower or of any substantial
part of the assets of the Borrower or shall commence any case or other
proceeding relating to the Borrower under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against the Borrower and the Borrower shall indicate its
approval thereof, consent thereto or acquiescence therein;


 


(h)                                 a
decree or order is entered appointing any such trustee, custodian, liquidator
or receiver or adjudicating the Borrower bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for relief
is entered in respect of the Borrower in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;


 


(i)                                     there
shall remain in force, undischarged, unsatisfied and unstayed, for more than
sixty (60) days, whether or not consecutive, any final non-appealable judgment
against the Borrower or any of its Subsidiaries that, with other outstanding
final judgments, undischarged, against the Borrower or any of its Subsidiaries
exceeds in the aggregate $1,000,000;


 


(j)                                     if
any of the Loan Documents shall be cancelled, terminated, revoked or rescinded
otherwise than in accordance with the terms thereof or with the express prior
written agreement, consent or approval of the Banks, or any action at law, suit
or in equity or other legal proceeding to cancel, revoke or rescind any of the
Loan Documents shall be commenced by or on behalf of the Guarantor or Borrower
party thereto or any of their respective stockholders, or any court or any
other governmental or regulatory authority or agency of competent jurisdiction
shall make a determination that, or issue a judgment, order, decree or ruling
to the effect that, any one or more of the Loan Documents is illegal, invalid
or unenforceable in accordance with the terms thereof;


 


(k)                                  with
respect to any Guaranteed Pension Plan, an ERISA Reportable Event shall have
occurred and the Majority Banks shall have determined in their reasonable
discretion that such event reasonably could be expected to result in liability
of the Borrower or any of its Subsidiaries to the PBGC or such Guaranteed
Pension Plan in an aggregate amount exceeding $500,000 and such event in the
circumstances occurring reasonably could constitute grounds for the termination
of such Guaranteed Pension Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or a trustee shall have been appointed by the United
States District Court to administer such Plan; or the PBGC shall have
instituted proceedings to terminate such Guaranteed Pension Plan;


 


41

















 


(l)                                     the
Borrower or any of its Subsidiaries shall be enjoined, restrained or in any way
prevented by the order of any court or any administrative or regulatory agency
from conducting any material part of its business and such order shall continue
in effect for more than thirty (30) days and would reasonably be expected to
have a Material Adverse Effect;


 


(m)                               there
shall occur any material damage to, or loss, theft or destruction of, any
Collateral, whether or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty, which in
any such case causes, for more than fifteen (15) consecutive days, the
cessation or substantial curtailment of revenue producing activities at any
facility of the Borrower or any of its Subsidiaries, if such event or
circumstance is not covered by business interruption insurance and would
reasonably be expected to have a Material Adverse Effect;


 


(n)                                 there
shall occur the loss, suspension or revocation of, or failure to renew, any
license or permit now held or hereafter acquired by the Borrower or any of its
Subsidiaries if such loss, suspension, revocation or failure to renew would
reasonably be expected to have a Material Adverse Effect;


 


(o)                                 the
Borrower or any of its Subsidiaries shall be indicted for a federal crime, a
punishment for which would reasonably be expected to have a Material Adverse
Effect;


 


(p)                                 the
Guarantor shall at any time own directly or indirectly less than one hundred
percent (100%) of the shares of capital stock of the Borrower (on a fully
diluted basis), as adjusted pursuant to any stock split, stock dividend or
recapitalization or reclassification of the capital of the Borrower; or


 


(q)                                 the
Borrower shall at any time own directly or indirectly less than one hundred
percent (100%) of the shares of capital stock of WNG Holdings (on a fully
diluted basis), as adjusted pursuant to any stock split, stock dividend or
recapitalization or reclassification of the capital of WNG Holdings.


 


then, and in any such
event, so long as the same may be continuing, the Agent may, and upon the
request of the Majority Banks shall, by notice in writing to the Borrower
declare all amounts owing with respect to this Credit Agreement, the Notes and
the other Loan Documents and all Reimbursement Obligations to be, and they
shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of
any Event of Default specified in §§13.1(g) or 13.1(h), all such amounts shall
become immediately due and payable automatically and without any requirement of
notice from the Agent or any Bank.


 


13. 2.                  Termination
of Commitments.  If any one or more of the Events of Default
specified in §13.1(g) or §13.1(h) shall occur, any unused portion of the credit
hereunder shall forthwith terminate and each of the Banks shall be relieved of
all further obligations to make Revolving Credit Loans to the Borrower and the
Agent shall be relieved of all further obligations to issue, extend or renew
Letters of Credit.  If any other Event
of Default shall have occurred and be continuing, the Agent may and, upon the
request of the Majority Banks, shall, by notice to the Borrower, terminate the
unused portion of the credit hereunder, and upon such notice being given such
unused portion of the credit hereunder shall terminate immediately and each of
the Banks shall be relieved of all further obligations to make Revolving Credit
Loans and the Agent shall be relieved of all further obligations to issue,
extend or renew Letters of Credit.  No
termination of the credit hereunder shall relieve the Borrower of any of the
Obligations.


 


42

















 


13. 3.                  Remedies.  In
case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the Banks shall have accelerated the maturity of
the Revolving Credit Loans pursuant to §13.1, each Bank, if owed any amount
with respect to the Revolving Credit Loans or the Reimbursement Obligations,
may, with the consent of the Majority Banks but not otherwise, proceed to
protect and enforce its rights by suit in equity, action at law or other
appropriate proceeding, whether for the specific performance of any covenant or
agreement contained in this Credit Agreement and the other Loan Documents or
any instrument pursuant to which the Obligations to such Bank are evidenced, including
as permitted by applicable law the obtaining of the ex  parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. 
No remedy herein conferred upon any Bank or the Agent or the holder of
any Note or purchaser of any Letter of Credit Participation is intended to be
exclusive of any other remedy and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or any other provision of law.


 


13. 4.                  Distribution
of Collateral Proceeds.  In the event that following the
occurrence or during the continuance of any Event of Default, the Agent or any
Bank, as the case may be, receives any monies in connection with the
enforcement of any of the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for application
as follows:


 


(a)                                  First,
to the payment of, or (as the case may be) the reimbursement of the Agent for
or in respect of all reasonable costs, expenses, disbursements and losses which
shall have been incurred or sustained by the Agent in connection with the
collection of such monies by the Agent, for the exercise, protection or
enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent under this Credit Agreement or any of the other Loan
Documents or in respect of the Collateral or in support of any provision of
adequate indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such monies;


 


(b)                                 Second,
to all other Obligations in such order or preference as the Majority Banks may
determine; provided, however, that (i) the Agent’s administrative
fee payable pursuant to §2.2 hereof shall rank pari  passu with
all other Obligations and (ii) all distributions shall be made among the Banks pro-rata
with respect to each type of Obligation such as interest, principal, fees and
expenses, and provided, additionally, that the Agent may in its
discretion make proper allowance to take into account any Obligations not then
due and payable;


 


(c)                                  Third,
upon payment and satisfaction in full or other provisions for payment in full
satisfactory to the Banks and the Agent of all of the Obligations, to the
payment of any obligations required to be paid pursuant to §9a-615(1)(c)(i) of
the Utah Uniform Commercial Code; and


 


(d)                                 Fourth,
the excess, if any, shall be returned to the Borrower or to such other Persons
as are entitled thereto.


 


14.                               SETOFF.


 


The
Borrower hereby grants to the Banks a continuing lien and security interest and
right of setoff as security for all Obligations upon and against all deposits,
credits, collateral and


 


43

















 


property
now or hereafter in the possession, custody, safekeeping or control of the
Banks or any of their Affiliates or in transit to any of them.  Regardless of the adequacy of any collateral,
during the continuance of any Event of Default, any deposits or other sums
credited by or due from any of the Banks to the Borrower and any securities or
other property of the Borrower in the possession of such Bank or in transit to it may be applied to
or set off by such Bank against the payment of Obligations of the Borrower to
such Bank.  ANY AND ALL RIGHTS TO REQUIRE THE BANKS
TO EXERCISE THEIR RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE OBLIGATIONS PRIOR TO EXERCISING THE RIGHT OF SETOFF ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.  Each of the Banks agrees with each other
Bank that (a) if an amount to be set off is to be applied to Indebtedness of
the Borrower to such Bank, other than Indebtedness evidenced by the Notes held
by such Bank or constituting Reimbursement Obligations owed to such Bank, such
amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Notes held by such Bank or constituting
Reimbursement Obligations owed to such Bank, and (b) if such Bank shall receive
from the Borrower, whether by voluntary payment, exercise of the right of
setoff, counterclaim, cross action, enforcement of the claim evidenced by the
Notes held by, or constituting Reimbursement Obligations owed to, such Bank by
proceedings against the Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings,
or otherwise, and shall retain and apply to the payment of the Note or Notes
held by, or Reimbursement Obligations owed to, such Bank any amount in excess
of its ratable portion of the payments received by all of the Banks with
respect to the Notes held by, and Reimbursement Obligations owed to, all of the
Banks, such Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution, pro  tanto
assignment of claims, subrogation or otherwise as shall result in each Bank
receiving in respect of the Notes held by it or Reimbursement Obligations owed
it, its proportionate payment as contemplated by this Credit Agreement; provided
that if all or any part of such excess payment is thereafter recovered from
such Bank, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest.


 


15.                               THE
AGENT.


 


15. 1.                  Authorization.  (a)  The
Agent is authorized to take such action on behalf of each of the Banks and to
exercise all such powers as are hereunder and under any of the other Loan
Documents and any related documents delegated to the Agent, together with such
powers as are reasonably incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein shall be implied to
have been assumed by the Agent.


 


(b)                                 The
relationship between the Agent and each of the Banks is that of an independent
contractor.  The use of the term “Agent”
is for convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks.  Nothing contained in this Credit
Agreement nor the other Loan Documents shall be construed to create an agency,
trust or other fiduciary relationship between the Agent and any of the Banks.


 


(c)                                  As
an independent contractor empowered by the Banks to exercise certain rights and
perform certain duties and responsibilities hereunder and under the other Loan
Documents, the Agent is nevertheless a “representative” of the Banks, as that
term is defined in Article 1 of the Uniform Commercial Code, for purposes
of actions for the benefit of the Banks and the Agent with respect to all
collateral security and guaranties contemplated by the Loan Documents.  Such actions include the designation of the
Agent as “secured party”, “mortgagee” or the like on all financing statements
and other documents and instruments, whether recorded or otherwise, relating to
the attachment, perfection, priority or enforcement of any security interests,


 


44

















 


mortgages or deeds of
trust in collateral security intended to secure the payment or performance of
any of the Obligations, all for the benefit of the Banks and the Agent.


 


15. 2.                  Employees and
Agents.  The Agent may exercise its powers and execute its
duties by or through employees or agents and shall be entitled to take, and to
rely on, advice of counsel concerning all matters pertaining to its rights and
duties under this Credit Agreement and the other Loan Documents.  In so doing, the Agent may utilize the
services of such Persons as the Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrower.


 


15. 3.                  No Liability.  Neither
the Agent nor any of its shareholders, directors, officers or employees nor any
other Person assisting them in their duties nor any agent or employee thereof,
shall be liable for any waiver, consent or approval given or any action taken,
or omitted to be taken, in good faith by it or them hereunder or under any of
the other Loan Documents, or in connection herewith or therewith, or be
responsible for the consequences of any oversight or error of judgment whatsoever,
except that the Agent or such other Person, as the case may be, may be liable
for losses due to its willful misconduct or gross negligence.


 


15. 4.                  No
Representations.


 


15. 4. 1.                             General.  The
Agent shall not be responsible for the execution or validity or enforceability
of this Credit Agreement, the Notes, the Letters of Credit, any of the other
Loan Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of
any such amounts owing with respect to the Notes, or for any recitals or
statements, warranties or representations made herein or in any of the other
Loan Documents or in any certificate or instrument hereafter furnished to it by
or on behalf of the Guarantor, or the Borrower or any of its Subsidiaries, or
be bound to ascertain or inquire as to the performance or observance of any of
the terms, conditions, covenants or agreements herein or in any instrument at
any time constituting, or intended to constitute, collateral security for the
Notes or to inspect any of the properties, books or records of the Borrower or
any of its Subsidiaries.  The Agent shall
not be bound to ascertain whether any notice, consent, waiver or request
delivered to it by the Borrower or any holder of any of the Notes shall have
been duly authorized or is true, accurate and complete.  The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the credit worthiness or financial
conditions of the Borrower.  Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Credit Agreement.


 


15. 4. 2.                             Closing
Documentation, etc.  For purposes of determining compliance
with the conditions set forth in §11, each Bank that has executed this Credit
Agreement shall be deemed to have consented to, approved or accepted, or to be
satisfied with, each document and matter either sent, or made available, by the
Agent to such Bank for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Bank, unless an officer of the Agent active upon the
Borrower’s account shall have received notice from such Bank prior to the
Closing Date specifying such Bank’s objection thereto and such objection shall
not have been withdrawn by notice to the Agent to such effect on or prior to
the Closing Date.


 


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15. 5.                  Payments.


 


15. 5. 1.                             Payments
to Agent.  A payment by the Borrower or the Guarantor to the
Agent hereunder or any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. 
The Agent agrees promptly to distribute to each Bank such Bank’s pro-rata
share of payments received by the Agent for the account of the Banks except as
otherwise expressly provided herein or in any of the other Loan Documents.


 


15. 5. 2.                             Distribution
by Agent.  If in the opinion of the Agent the distribution of
any amount received by it in such capacity hereunder, under the Notes or under
any of the other Loan Documents might involve it in liability, it may refrain
from making distributions until its right to make distributions shall have been
adjudicated by a court of competent jurisdiction.  If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to the Agent
its proportionate share of the amount so adjudged to be repaid or shall pay
over the same in such manner and to such Persons as shall be determined by such
court.


 


15. 5. 3.                             Delinquent
Banks.  Notwithstanding anything to the contrary contained in
this Credit Agreement or any of the other Loan Documents, any Bank that fails
(a) to make available to the Agent its pro-rata share of any
Revolving Credit Loan or to purchase any Letter of Credit Participation or (b)
to comply with the provisions of §14 with respect to making dispositions and
arrangements with the other Banks, where such Bank’s share of any payment
received, whether by setoff or otherwise, is in excess of its pro-rata
share of such payments due and payable to all of the Banks, in each case as,
when and to the full extent required by the provisions of this Credit
Agreement, shall be deemed delinquent (a “Delinquent Bank”) and shall be deemed
a Delinquent Bank until such time as such delinquency is satisfied.  During the continuance of such delinquency,
a Delinquent Bank shall not be entitled to vote on any matters relating to or
affecting this Credit Agreement or affecting this Credit Agreement or the other
Loan Documents, including without limitation, any waivers or amendments hereto
or thereto and for purposes of determining which Banks constitute Majority
Banks hereunder, the outstanding principal amount of the Notes held by such
Delinquent Bank (or in the event that there shall be no outstanding amounts
under such Delinquent Bank’s Notes, then such Delinquent Bank’s Commitment
Percentage) shall be disregarded.  A
Delinquent Bank shall be deemed to have assigned any and all payments due to it
from the Borrower, whether on account of outstanding Revolving Credit Loans,
Unpaid Reimbursement Obligations, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective pro-rata
shares of all outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations.  The Delinquent Bank hereby
authorizes the Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective pro-rata shares of all outstanding
Revolving Credit Loans and Unpaid Reimbursement Obligations.  A Delinquent Bank shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Revolving Credit Loans and Unpaid
Reimbursement Obligations of the nondelinquent Banks, the Banks’ respective pro-rata
shares of all outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.


 


15. 6.                  Holders of
Notes.  The Agent may deem and treat the payee of any Note or
the purchaser of any Letter of Credit Participation as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.


 


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15. 7.                  Indemnity.  The
Banks ratably agree hereby to indemnify and hold harmless the Agent from and
against any and all claims, actions and suits (whether groundless or
otherwise), losses, damages, costs, expenses (including any expenses for which
the Agent has not been reimbursed by the Borrower as required by §16), and
liabilities of every nature and character arising out of or related to this
Credit Agreement, the Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Agent’s actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Agent’s willful misconduct or gross negligence.


 


15. 8.                  Agent as Bank.  In
its individual capacity, KeyBank shall have the same obligations and the same
rights, powers and privileges in respect to its Revolving Credit Commitment and
the Revolving Credit Loans made by it, and as the holder of any of the Notes
and as the purchaser of any Letter of Credit Participations, as it would have
were it not also the Agent.


 


15. 9.                  Resignation.  The
Agent may resign at any time by giving sixty (60) days prior written notice
thereof to the Banks and the Borrower. 
Upon any such resignation, the Majority Banks shall have the right to
appoint a successor Agent.  Unless a
Default or Event of Default shall have occurred and be continuing, such
successor Agent shall be reasonably acceptable to the Borrower.  If no successor Agent shall have been so appointed
by the Majority Banks and shall have accepted such appointment within thirty
(30) days after the retiring Agent’s giving of notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a financial institution having a rating of not less than “A” or its
equivalent by Standard & Poor’s Rating Group.  Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder.  After any
retiring Agent’s resignation, the provisions of this Credit Agreement and the
other Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.


 


15. 10.  Notification of Defaults and Events of
Default.  Each Bank hereby agrees that, upon learning
of the existence of a Default or an Event of Default, it shall promptly notify
the Agent thereof.  The Agent hereby
agrees that upon receipt of any notice under this §15.10 it shall promptly
notify the other Banks of the existence of such Default or Event of Default.


 


15. 11.  Duties in the Case of Enforcement.  In
case one or more Events of Default have occurred and shall be continuing, and
whether or not acceleration of the Obligations shall have occurred, the Agent
shall, if (a) so requested by the Majority Banks and (b) the Banks have
provided to the Agent such additional indemnities and assurances against
expenses and liabilities as the Agent may reasonably request, proceed to
enforce the provisions of the Security Documents authorizing the sale or other
disposition of all or any part of the Collateral and exercise all or any such
other legal and equitable and other rights or remedies as it may have in
respect of such Collateral.  The
Majority Banks may direct the Agent in writing as to the method and the extent
of any such sale or other disposition, the Banks hereby agreeing to indemnify
and hold the Agent, harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, provided that the
Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent’s compliance with such direction to be unlawful
or commercially unreasonable in any applicable jurisdiction.


 


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16.                               EXPENSES.


 


The Borrower agrees to
pay (a) the reasonable costs of producing and reproducing this Credit
Agreement, the other Loan Documents and the other agreements and instruments
mentioned herein, (b) any taxes (including any interest and penalties in respect
thereto) payable by the Agent or any of the Banks (other than Excluded Taxes)
on or with respect to the transactions contemplated by this Credit Agreement
(the Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Agent’s
Special Counsel or any local counsel to the Agent incurred in connection with
the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the
fees, expenses and disbursements of the Agent incurred by the Agent in
connection with the preparation, administration or interpretation of the Loan Documents
and other instruments mentioned herein, including all title insurance premiums
and surveyor, engineering and appraisal charges, and fees and expenses relating
to periodic commercial finance examinations and environmental site assessments,
(e) all reasonable out-of-pocket expenses (including without limitation
reasonable attorneys’ fees and costs, which attorneys may be employees of any
Bank or the Agent, and reasonable consulting, accounting, appraisal, investment
banking and similar professional fees and charges) incurred by any Bank or the
Agent in connection with (i) the enforcement of or preservation of rights under
any of the Loan Documents against the Borrower or the administration thereof
after the occurrence of a Default or Event of Default and (ii) any litigation,
proceeding or dispute to enforce or protect its rights arising hereunder or
under the Loan Documents, and (f) all reasonable fees, expenses and
disbursements of any Bank or the Agent incurred in connection with UCC
searches, UCC filings, mortgage recordings or such other filings relating to
the Agent’s security interests in the Collateral.  The covenants of this §16 shall survive payment or satisfaction
of all other Obligations.


 


17.                               INDEMNIFICATION.


 


The Borrower agrees to
indemnify and hold harmless the Agent and the Banks from and against any and
all claims, actions and suits whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses of every nature
and character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby (other than any liability
arising out of the gross negligence or willful misconduct of the Person seeking
indemnification) including, without limitation, (a) any actual or proposed use
by the Borrower of the proceeds of any of the Revolving Credit Loans or Letters
of Credit, (b) any actual or alleged infringement of any patent, copyright,
trademark, service mark or similar right of the Borrower comprised in the Collateral,
(c) the Borrower entering into or performing this Credit Agreement or any of
the other Loan Documents or (d) with respect to the Borrower and its
Subsidiaries and their respective properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threatened release of any Hazardous Substances
or any action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to, claims with
respect to wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. 
In litigation, or the preparation therefor, the Banks and the Agent
shall be entitled to select their own counsel, but may agree to use joint
counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel.  If, and to the extent that the obligations
of the Borrower under this §17 are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment in satisfaction
of such obligations which is permissible


 


48

















 


under applicable
law.  The covenants contained in this
§17 shall survive payment or satisfaction in full of all other Obligations.


 


18.                               SURVIVAL OF COVENANTS, ETC.


 


All covenants,
agreements, representations and warranties made herein, in the Notes, in any of
the other Loan Documents or in any documents or other papers delivered by or on
behalf of the Borrower pursuant hereto shall be deemed to have been relied upon
by the Banks and the Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Banks of any
of the Revolving Credit Loans and the issuance, extension or renewal of any
Letters of Credit, as herein contemplated, and shall continue in full force and
effect so long as any Letter of Credit or any amount due under this Credit
Agreement or the Notes or any of the other Loan Documents remains outstanding
or any Bank has any obligation to make any Revolving Credit Loans or the Agent
has any obligation to issue, extend or renew any Letter of Credit, and for such
further time as may be otherwise expressly specified in this Credit Agreement.  All statements contained in any certificate
or other paper delivered to any Bank or the Agent at any time by or on behalf
of the Borrower pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by such
Borrower hereunder.


 


19.                               ASSIGNMENT AND PARTICIPATION.


 


19. 1.                  Conditions to
Assignment by Banks.  Except as provided herein, each Bank
may assign to one or more Eligible Assignees all or a portion of its interests,
rights and obligations under this Credit Agreement (including all or a portion
of its Commitment Percentage, Revolving Credit Commitment, and a portion of the
Revolving Credit Loans at the time owing to it, the Notes held by it and its
participating interest in any Letters of Credit); provided that (a) each
of the Agent and the Borrower shall have given their prior written consent to
the proposed Eligible Assignee, which consent, in the case of the Borrower,
will not be unreasonably withheld, (b) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Bank’s rights and
obligations with respect to the Revolving Credit Loans, and the Term Loans
under this Credit Agreement, (c) each assignment shall be at least in an amount
equal to $5,000,000 (or in an amount equal to such assigning Bank’s interest
hereunder, if less than $5,000,000), (d) the assigning Bank shall pay an
assignment fee in an amount equal to $3,500 per assignment to the Agent, and
(e) the parties to such assignment shall execute and deliver to the Agent, for recording
in the Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of Exhibit E hereto (an
“Assignment and Acceptance”), together with any Notes subject to such
assignment.  Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, (i) the assignee thereunder
shall be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder, and (ii) the
assigning Bank shall, to the extent provided in such assignment and upon
payment to the Agent of the registration fee referred to in §19.3, be released
from its obligations under this Credit Agreement.


 


19. 2.                  Certain
Representations and Warranties; Limitations; Covenants.  By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other
parties hereto as follows:


 


(a)                                  other
than the representation and warranty that it is the legal and beneficial owner
of the interest being assigned thereby free and clear of any adverse claim, the
assigning Bank makes no representation or warranty, express or implied, and
assumes no responsibility with respect to any statements, warranties or
representations made in or in


 


49

















 


connection with this
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or mortgage,


 


(b)                                 the
assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Person primarily or secondarily liable in respect of any of the
Obligations, or the performance or observance by the Borrower or any other
Person primarily or secondarily liable in respect of any of the Obligations of
any of their obligations under this Credit Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto;


 


(c)                                  such
assignee confirms that it has received a copy of this Credit Agreement,
together with copies of the most recent financial statements referred to in
§§7.4 and 8.4 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance;


 


(d)                                 such
assignee will, independently and without reliance upon the assigning Bank, the
Agent or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement;


 


(e)                                  such
assignee represents and warrants that it is an Eligible Assignee;


 


(f)                                    such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Credit Agreement and the other
Loan Documents as are delegated to the Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto;


 


(g)                                 such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Credit Agreement are required to be
performed by it as a Bank; and


 


(h)                                 such
assignee represents and warrants that it is legally authorized to enter into
such Assignment and Acceptance.


 


19. 3.                  Register.  The
Agent shall maintain a copy of each Assignment and Acceptance delivered to it
and a register or similar list (the “Register”) for the recordation of the names
and addresses of the Banks and the Commitment Percentage of, and principal
amount of the Revolving Credit Loans owing to and Letter of Credit
Participations purchased by, the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Credit
Agreement.  The Register shall be
available for inspection by the Borrower and the Banks at any reasonable time
and from time to time upon reasonable prior notice.


 


19. 4.                  New Notes.  Upon
its receipt of an Assignment and Acceptance executed by the parties to such
assignment, together with each Note subject to such assignment, the Agent shall
(a) record the information contained therein in the Register, and (b) give
prompt notice thereof to the Borrower and the Banks (other than the assigning
Bank).  Within five (5) Business Days
after receipt of such notice, the Borrower, at its own expense, shall execute
and deliver to the Agent, in exchange for each surrendered Note, a new Note to
the order of such Eligible Assignee in an amount equal to the amount assumed by
such Eligible Assignee pursuant to such Assignment


 


50

















 


and Acceptance and, if
the assigning Bank has retained some portion of its obligations hereunder, a
new Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder.  Such new Notes
shall provide that they are replacements for the surrendered Notes, shall be in
an aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such in Assignment and
Acceptance and shall otherwise be substantially the form of the assigned
Notes.  The surrendered Notes shall be
cancelledand returned to the Borrower.


 


19. 5.                  Participations.  Each
Bank may sell participations to one or more banks or other entities in all or a
portion of such Bank’s rights and obligations under this Credit Agreement and
the other Loan Documents; provided that (a) each such participation
shall be in an amount of not less than $5,000,000, (b) any such sale or
participation shall not affect the rights and duties of the selling Bank
hereunder to the Borrower, and (c) any such sale or participation shall not
affect the obligations of the Agent to the selling Bank nor create any
obligations of the Agent to the participant.


 


19. 6.                  Disclosure.  The
Borrower agrees that in addition to disclosures made in accordance with
standard and customary banking practices any Bank may disclose information
obtained by such Bank pursuant to this Credit Agreement to assignees or
participants and potential assignees or participants hereunder; provided
that such assignees or participants or potential assignees or participants
shall agree (a) to treat in confidence such information unless such information
otherwise becomes public knowledge, (b) not to disclose such information to a third
party, except as required by law or legal process and (c) not to make use of
such information for purposes of transactions unrelated to such contemplated
assignment or participation.


 


19. 7.                  Assignee or
Participant Affiliated with the Borrower.  If any assignee
Bank is an Affiliate of the Borrower, then any such assignee Bank shall have no
right to vote as a Bank hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or other modifications to any of the Loan Documents or for purposes
of making requests to the Agent pursuant to §§13.1 or 13.2, and the
determination of the Majority Banks shall for all purposes of this Agreement
and the other Loan Documents be made without regard to such assignee Bank’s
interest in any of the Revolving Credit Loans. 
If any Bank sells a participating interest in any of the Revolving
Credit Loans or Reimbursement Obligations to a participant, and such participant
is an Affiliate of the Borrower, then such transferor Bank shall promptly
notify the Agent of the sale of such participation.  A transferor Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of
the Loan Documents or for purposes of making requests to the Agent pursuant to
§§13.1 or 13.2 to the extent that such participation is beneficially owned by
any Affiliate of the Borrower, and the determination of the Majority Banks
shall for all purposes of this Credit Agreement and the other Loan Documents be
made without regard to the interest of such transferor Bank in the Revolving
Credit Loans to the extent of such participation.


 


19. 8.                  Miscellaneous
Assignment Provisions.  Any assigning Bank shall retain its
rights to be indemnified pursuant to §§16 and 17 with respect to any expenses,
claims or actions arising prior to the date of such assignment.  If any assignee Bank is not incorporated under
the laws of the United States of America or any state thereof, it shall, prior
to the date on which any interest or fees are payable hereunder or under any of
the other Loan Documents for its account, deliver to the Borrower and the Agent
certification as to its exemption from deduction or withholdings of any United
States federal income taxes.  If KeyBank
transfers all of its interest, rights and obligations under this Credit
Agreement, the Agent shall, in consultation with the Borrower and with the consent
of the Borrower and the Majority Banks, appoint another Bank to act as a
“Reference Bank” for purposes of determining the LIBOR Rate hereunder.  Anything


 


51

















 


contained in this §19 to
the contrary notwithstanding, any Bank may at any time pledge all or any
portion of its interest and rights under this Credit Agreement (including all
or any portion of its Notes) to (a) any of the twelve Federal Reserve Banks
organized under §4 of the Federal Reserve Act, 12 U.S.C. §341 or (b) to a
lender or such bank (or trustee therefor) in connection with a bona fide
financing transaction.  No such pledge
or the enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents, provide any voting rights
hereunder to the pledgee thereof, or affect any rights or obligations of the
Borrower or the Agent hereunder.


 


19. 9.                  Assignment by
Borrower.  The Borrower shall not assign or transfer any of
its rights or obligations under any of the Loan Documents without the prior
written consent of each of the Banks.


 


20.                               NOTICES, ETC.


 


Except as otherwise
expressly provided in this Credit Agreement, all notices and other
communications made or required to be given pursuant to this Credit Agreement
or the Notes or any Letter of Credit Applications shall be in writing and shall
be delivered in hand, mailed by United States registered or certified first
class mail, postage prepaid, sent by overnight courier, or sent by telegraph, telecopy,
facsimile or telex and confirmed by delivery via courier or postal service,
addressed as follows:


 


(a)                                  if
to the Borrower, at 2002 South 5070 West, Salt Lake City, Utah  84104-4726, Attention:  Chief Financial
Officer; in each case with a copy to Stoel Rives LLP, 201 South Main
Street, Suite 1100, Salt Lake City, Utah 84111, Attention:  Reed W. Topham, Esq., or at such other
address for notice as the Borrower shall last have furnished in writing to the
Person giving the notice;


 


(b)                                 if
to the Agent, at 50 South Main Street, Suite 2007, Salt Lake City, Utah  84144, Attention: David C. Sagers, Vice
President; in each case with a copy to Van Cott, Bagley, Cornwall &
McCarthy, P.C., 50 South Main Street, Suite 1600, Salt Lake City, Utah 84144,
Attention:  Tacy A. Hartman, Esq., or
such other address for notice as the Agent shall last have furnished in writing
to the Person giving the notice; and


 


(c)                                  if
to any Bank, at such Bank’s address set forth on Schedule 1 hereto,
or such other address for notice as such Bank shall have last furnished in
writing to the Person giving the notice.


 


Any such notice or demand
shall be deemed to have been duly given or made and to have become effective
(i) if delivered by hand, overnight courier or facsimile to a responsible
officer of the party to which it is directed, at the time of the receipt
thereof by such officer or the time of confirmation of receipt of such
facsimile as recorded by the facsimile machine sending the same and (ii) if
sent by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.


 


52

















 


21.                               GOVERNING LAW.


 


THIS CREDIT AGREEMENT AND, EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE
CONTRACTS UNDER THE LAWS OF THE STATE OF UTAH AND SHALL FOR ALL PURPOSES BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE OF UTAH
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).  THE BORROWER AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF UTAH OR ANY FEDERAL COURT SITTING THEREIN
AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS
SPECIFIED IN §20.  THE BORROWER HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.


 


22.                               HEADINGS.


 


The captions in this
Credit Agreement are for convenience of reference only and shall not define or
limit the provisions hereof.


 


23.                               COUNTERPARTS.


 


This Credit Agreement and
any amendment hereof may be executed in several counterparts and by each party
on a separate counterpart, each of which when executed and delivered shall be
an original, and all of which together shall constitute one instrument.  In proving this Credit Agreement it shall
not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.


 


24.                               ENTIRE AGREEMENT, ETC.


 


The Loan Documents and
any other documents executed in connection herewith or therewith express the
entire understanding of the parties with respect to the transactions
contemplated hereby. Neither this Credit Agreement nor any term hereof may be
changed, waived, discharged or terminated, except as provided in §26.


 


25.                               WAIVER OF JURY TRIAL.


 


The Borrower hereby
waives its right to a jury trial with respect to any action or claim arising
out of any dispute in connection with this Credit Agreement, the Notes or any
of the other Loan Documents, any rights or obligations hereunder or thereunder
or the performance of which rights and obligations.  Except as prohibited by law, the Borrower hereby waives any right
it may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages.  The Borrower (a) certifies that no
representative, agent or attorney of any Bank or the Agent has represented,
expressly or otherwise, that such Bank or the Agent would not, in the event of
litigation, seek to enforce the foregoing waivers and (b) acknowledges that the
Agent and the Banks have been induced to enter into this Credit Agreement, the
other Loan Documents to which it is a party by, among other things, the waivers
and certifications contained herein.


 


53

















 


26.                               CONSENTS, AMENDMENTS, WAIVERS, ETC.


 


Any consent or approval
required or permitted by this Credit Agreement to be given by all of the Banks
may be given, and any term of this Credit Agreement, the other Loan Documents
or any other instrument related hereto or mentioned herein may be amended, and
the performance or observance by the Borrower of any terms of this Credit
Agreement, the other Loan Documents or such other instrument or the continuance
of any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Borrower and the written consent of the
Majority Banks.  Notwithstanding the
foregoing, the rate of interest on the Notes (other than interest accruing
pursuant to §5.9.2 following the effective date of any waiver by the Majority
Banks of the Event of Default relating thereto), the term of the Notes, the
amount of the Revolving Credit Commitments of the Banks, and the amount and
timing of fees payable for the account of the Banks hereunder may not be
changed without the written consent of the Borrower and the written consent of
each Bank affected thereby; the definition of Majority Banks may not be amended
without the written consent of all of the Banks; and the amount of the Agent’s
administrative fee or any Letter of Credit fees payable for the Agent’s account
and §15 may not be amended without the written consent of the Agent.  No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon.  No course of dealing or delay or omission on
the part of the Agent or any Bank in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto.  No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other
circumstances.


 


27.                               SEVERABILITY.


 


The provisions of this
Credit Agreement are severable and if any one clause or provision hereof shall
be held invalid or unenforceable in whole or in part in any jurisdiction, then
such invalidity or unenforceability shall affect only such clause or provision,
or part thereof, in such jurisdiction, and shall not in any manner affect such
clause or provision in any other jurisdiction, or any other clause or provision
of this Credit Agreement in any jurisdiction.


 


28.                               TREATMENT OF CERTAIN
CONFIDENTIAL INFORMATION.


 


28. 1.                  Sharing of
Information with Section 20 Subsidiary.  The Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
Subsidiaries, in connection with this Credit Agreement or otherwise, by a
Section 20 Subsidiary.  If the
Borrower engages any such Section 20 Subsidiary, the Borrower, for itself
and each of its Subsidiaries, hereby authorizes (a) such Section 20
Subsidiary to share with the Agent and each Bank any information delivered to
such Section 20 Subsidiary by the Borrower or any of its Subsidiaries, and
(b) the Agent and each Bank to share with such Section 20 Subsidiary any
information delivered to the Agent or such Bank by the Borrower or any of its
Subsidiaries pursuant to this Credit Agreement, or in connection with the
decision of such Bank to enter into this Credit Agreement; it being understood,
in each case, that any such Section 20 Subsidiary receiving such
information shall be bound by the confidentiality provisions of this Credit
Agreement.  Such authorization shall
survive the payment and satisfaction in full of all of the Obligations.


 


28. 2.                  Confidentiality.  Each
of the Banks and the Agent agrees, on behalf of itself and each of its
affiliates, directors, officers, employees and representatives, to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any non-public information supplied to it by or on
behalf of the Borrower or any of its Subsidiaries pursuant to this Credit
Agreement, the Loan Documents, or otherwise, that is identified by such Person
as being confidential at the time the same is delivered to the Banks or the
Agent, provided that nothing


 


54

















 


herein shall limit the
disclosure of any such information (a) after such information shall have become
public other than through a violation of this §28, (b) to the extent required
by statute, rule, regulation or judicial process, (c) to counsel for any of the
Banks or the Agent, (d) to bank examiners or any other regulatory authority
having jurisdiction over any Bank or the Agent, or to auditors or accountants,
(e) to the Agent, any Bank or any Section 20 Subsidiary (to the extent
permitted under §28.1), (f) in connection with any litigation to which any one
or more of the Banks, the Agent or any Section 20 Subsidiary is a party,
or in connection with the enforcement of rights or remedies hereunder or under
any other Loan Document, (g) to a Subsidiary or affiliate of such Bank to the
extent permitted and as provided under §28.1, or (h) to any assignee or
participant (or prospective assignee or participant) so long as such assignee
or participant agrees to be bound by the provisions of §19.6.


 


28. 3.                  Prior
Notification.  Unless specifically prohibited by applicable
law or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such non-public
information by any governmental agency or representative thereof (other than
any such request in connection with an examination of the financial condition
of such Bank by such governmental agency) or pursuant to legal process.


 


28. 4.                  Other.  In
no event shall any Bank or the Agent be obligated or required to return any
materials furnished to it or any Section 20 Subsidiary by the Borrower or
any of its Subsidiaries.  The
obligations of each Bank under this §27 shall supersede and replace the
obligations of such Bank under any confidentiality letter in respect of this
financing signed and delivered by such Bank to the Borrower prior to the date
hereof and shall be binding upon any assignee of, or purchaser of any
participation in, any interest in any of the Revolving Credit Loans or
Reimbursement Obligations from any Bank.


 


55

















 


IN WITNESS WHEREOF,
the undersigned have duly executed this Credit Agreement as a sealed instrument
as of the date first set forth above.


 


 


	
  THE BORROWER:

  	
  WEIDER
  NUTRITION GROUP, INC.,  a
  Utah

  
	
   

  	
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Joseph Baty

  
	
   

  	
  Its:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE AGENT:

  	
  KEYBANK
  NATIONAL ASSOCIATION, as

  
	
   

  	
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  David C. Sagers

  
	
   

  	
  Its:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE BANKS:

  	
  KEYBANK NATIONAL ASSOCIATION,

  
	
   

  	
  individually

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  David C. Sagers

  
	
   

  	
  Its:

  	
  Vice President

  



 


56

















 


SCHEDULE 1


 


	
  Banks

  	
   

  	
  Commitment

  Percentage

  	
   

  	
  Revolving

  Credit

  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  KeyBank National
  Association

  	
   

  	
  100.00%

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  
	
   

  	
  50 South Main Street

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Suite 2007

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  P.O. Box 30815

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Salt Lake City, Utah
  84144

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Tel: 801-535-1107

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fax: 801-535-1120

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attn:

  	
  David C. Sagers

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  	
   

  
									



 


57